Unfortunately First Principal Bank has had it's domain name seized due to alleged trademark infringements.

Operations will continue as usual under a new name and domain https://CryptoCoinSavings.co.

We believe that peer critique can be a valuable self regulatory process. I asked  TradeFortress where I could post this and he pointed here. TradeFortress has also provided a response to all our points making both sides clearly visible.

If you'd like to put forward your own criticisms towards First Principal Bank you're welcome in our announcement thread:

https://bitcointalk.org/index.php?topic=276636

Or create your own thread, please PM me if you do.

Crypto-currencies opens up the possibility of another era of free-banking, not seen since the 19th century. I guess it all depends on your frame of reference. Undoubtedly many will fail.

With great freedom comes great responsibility.

This is going to be the official critique of CoinLenders by First Principal Bank. We may be biased as a direct competitor but in no way should this be interpreted as an accusation of TradeFortress or a solicitation to our services. All of the points below are purely circumstantial and/or theoretical, many which may or may not have been raised before.

* Website Changes

IANAL but the wordings would probably not hold up in court making it a moot point.

* Inverted yield curve

An inverted yield curve tends to exacerbate maturity mismatch which in turn increases vulnerability to bank runs.

* Inputs.io

The relation to Inputs.io has not been clear. Inputs.io advertises a shared wallet as a feature (which is undoubtedly is) but makes insight into individual wallets difficult and also opens up the possibility of re-hypothecation.

* Lending risk

If CL makes a significant portion of uncollateralized private loans, this may expose CL to an increased default risk.

* Opacity

Little or no insight to balance sheet. Primarily capital ratio.

Thanks for your input!


Management wishes to remain private for the time being, until we can find a jurisdiction with regulatory clarity. Not only to protect us, but also our customers. But you're right, we should be able to put up an about page.


The founders are currently the only shareholders. We might consider listing on an exchange at some later date. At the moment we have no need to raise further equity.


I've pointed out some caveats to the numbers TradeFortress presented. We have to rely on our own analysis when deciding rates.


This is your opinion. Others may welcome having interest rates guaranteed for a full year. We will probably have to adjust our rates going forward.


Only loose change to cover immediate withdrawals are stored on our server. Most of our assets are spread out across the markets. All of our procedures, including the website, have been designed with security in mind.


Litecoin markets are still illiquid and offer few opportunities for diversification. If/when this changes we might consider it.

Everyone has more trust than us at the moment since we're just getting started. I'd like to point out some caveats in the figures you've provided though;

• Ukyo.Loan pays 0.05% daily on nominally 0.01. Last traded price is 0.01075, which yields an effective market rate of 18.5% when accounting for daily re-investments
• Similarly with XBOND, it pays 0.05% daily on 0.001 nominally. Last traded price is 0.0011 which yields 18.0%. In addition, they can only be redeemed at 95% of face value.
• Is Xaviarlol referring to BTC-EQTY? I'm not familiar with that one but it doesn't seem to relate to fixed income.
• Is DMS referring to Deprived Mining Speculation (DMS)? Again, I don't see how that relates to fixed income.
• Is there a separate thread where criticism of CoinLenders have been brought up before or can be discussed?

I think this illustrates some of the pitfalls in the security markets that people may or may not take interest in.

We want to bring the highest rates of return at the lowest possible risk with reasonable assurance of principal to individuals who may not feel confident in the securities markets or otherwise just lack time or interest.

If you feel comfortable with coinlenders there's no reason to move your coins anywhere. I have nothing bad to say about coinlenders. TradeFortress is well known and respected around here but even he had to start somewhere.

I can't prove to you that we're not running a ponzi-scheme. If I were to set up a ponzi-scheme I think I'd structure it differently though. We see this an opportunity to establish a reputable fixed-income source in the bitcoin economy rather early on. 


Profits are generated by investing in bitcoin nominated securities. There are multiple securities paying out daily interest or dividends; https://btct.co/security/BTC-BOND and https://www.havelockinvestments.com/fund.php?symbol=XBOND to name two.


Our investment goal is to extract the "market rate" through our portfolio and adjust our rates accordingly. In the event of a loss it is covered by equity, like any other company.


This is the official account for First Principal bank. Personally I've been involved with bitcoin since 2011 but none of us have been vocal in the community before.

We at First Principal Bank recognize the limited options for fixed income investments in the bitcoin space and would like to offer an opportunity for diversification.

We offer straight forward time deposits (CD's) with maturities ranging from 1 to 365 days.

Constructive criticism is always appreciated!

Visit us at http://firstprincipalbank.com/

Hi,

This is the official Public Relations / support account for First Principal Bank, http://firstprincipalbank.com/.

We at First Principal Bank recognize the limited options for fixed income investments in the bitcoin space and would like to offer an opportunity for diversification.

We offer straight forward time deposits (CD's) with maturities ranging from 1 to 365 days.

-Fred