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Author Topic: [ANN] TorBroker - Fund your account in Bitcoin, trade >1000 real stocks and ETFs  (Read 14077 times)
TorBroker
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March 26, 2013, 11:28:00 PM
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TorBroker is the first broker to offer Bitcoin users direct access to the world’s securities markets. Fund you account with bitcoins and start investing, hedging, or speculating in more than 1000 different stocks and ETFs, and best of all, cash out in bitcoins whenever you want.



--------------------------------

Today global insolvency seems to justify increasingly desperate government actions such as confiscation of savings, unprecedented global money printing, interest rates suppression and knee-jerk attempts to regulate, incriminate and excessively survey ordinary financial transactions.

Bitcoin essentially empowers individuals to circumvent the consequences of these policies by combining unique attributes that set Bitcoin apart from all other mediums of exchange:
With Bitcoin there is no risk of third party seizure, no taxation, no arbitrary oversight, no unanticipated inflation, no chargebacks and almost no transaction fees. This is why businesses all around the world are increasingly recognizing and embracing bitcoins, but so far the gap between Bitcoin and the global securities markets has yet to be bridged. This is why we are developing TorBroker.  

At TorBroker we offer you the possibility to fund your account with Bitcoins, invest in almost 1000 different stocks and ETF’s and cash out in Bitcoin. Through the utilization of the Tor network, TorBroker offers you privacy when investing, harnessing one of the most important aspects of Bitcoin itself, privacy. Not only do we offer privacy, but TorBroker enters the underlying position in the real markets, giving you “non-synthetic” exposure towards the different securities we offer. Visit us at https://torbrokerge7zxgq.onion.lu, fund your account with bitcoins, and take full control of your financial future.      



How does it work?
1. A) Recommended: Go to http://torbrokerge7zxgq.onion using the Tor browser. B) Or go to https://torbrokerge7zxgq.onion.lu using your regular browser.
2. Register an account with username and password.
3. Deposit bitcoins. Within 24 hours they will be credited your account in US dollars.
4. Pick a security to long or short. At the next market opening, we will mirror your position on the real market.
5. Exit the position. At the next market opening, we will exit our position on the real market and credit your account with the resulting gains or losses.
6. At any time you can choose to withdraw your US dollar balance to your bitcoin address. We will carry out your withdrawal within 24 hours.

What does it cost?
In this beta version we charge a 1% commission on any trade - that is both entering and exiting positions - with a minimum commission equivalent to 5 dollars per trade.

When is my trade executed?
In this beta version, in order to get your order executed on the day, you need to put in the order before 8:30 am EST and we will put in your trade as a pending order to be executed as soon as the markets open (9:30 am EST). Any order that is entered after this deadline (8:30 am EST) will not be executed before the next opening day. Thus we recommend that you wait until the markets close to enter your orders in order to ensure you that you get the opening market price. Any dividends will be added to your account balance when you exit your position.

The current TorBroker version is a manual proof of concept to test if there is demand for an online brokerage that accepts Bitcoins. We are currently implementing an automated trading service with instant execution to be released in the coming months.

Are my funds secure?
The bitcoins we receive are exchanged to dollars and withdrawn to our stock broker account as soon as any significant amount is reached. Therefore, only small amounts, which we guarantee out of our own pockets, are vulnerable to potential Bitcoin wallet related security issues with our Bitcoin setup or the Bitcoin exchange.

The TorBroker software is developed using best security practices by security professionals from the bottom up. All major functions are split between separate servers ensuring strict damage control. Access to services is strictly logged and reviewed regularly. Data is always encrypted when transferred across networks.

We exchange the bitcoins we receive to dollars within 24 hours to insure our customers that TorBroker won’t go broke due to exposure to the extreme volatility of the bitcoin price. To our knowledge no other bitcoin related broker offers this immediate hedging and by not doing so they put their customers at risk of a company default.

Who are you?
Three people in the TorBroker team are long-time members of the Bitcoin community with public identities and impeccable records from their earlier Bitcoin ventures. One team member has earlier experience in developing high-speed trading systems for a large financial company. Two other TorBroker team members have years of experience in portfolio management.

However, due to the current legal uncertainty regarding our business our names cannot be revealed at this point.

Can I trust TorBroker?
We believe this can be a profitable business and are in it for the long run. We will never betray the trust of our customers.

We believe it is important to make our business case clear to our customers. By knowing we are making a profit by running TorBroker in a fair and justified manner, you know it is in our best interest to keep the service running professionally and retain the trust of our customers to maximize our reputation and profit.

For all anonymous services that have to decide whether they should be honest or fraudalent, it comes down to the time preference of the operators. Do they prefer (a) smaller profit now by running away with customer money, or (b) larger profit by running a reliable service for years and years.

For it to be more profitable for us to run a long-term service, with our 1% fee on trades, we only need to expect that we will have a future volume for eternity of at least 100x the current holdings of our customers. Considering we plan to offer leveraged trading in the future, this is actually not a lot. We would have to be quite short-sighted to not run a reliable business for the long term.

While we could also talk about how our team is firmly grounded in libertarian moral theory and we despise fraud as much as violence, the above is the strongest argument for our honesty, because it only relies on the premise of us trying to maximize profits.

Upcoming features
TorBroker is currently in the beta stage and undergoing active development. Features to be implemented soon include:

  • Automated instant trading
  • Margin trading
  • More informative portfolio interface
  • Google two-factor authentication
  • More securities in more markets

I’m ready to trade real securities with my bitcoins
A) Recommended: Go to http://torbrokerge7zxgq.onion using the Tor browser. B) Or go to https://torbrokerge7zxgq.onion.lu using your regular browser.

Get updated about new features and securities
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TorBroker: Trade >1000 real stocks and ETFs and cash out in Bitcoin - BitcoinTalk - TOR Website
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March 26, 2013, 11:31:40 PM
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Good timing. Checking out now.

Please sir, can I have some more? 15EkMRuhcRVnfA9mAv6LprsjZgsJibFxSe
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March 27, 2013, 01:14:12 AM
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This looks fun

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March 27, 2013, 01:34:44 AM
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GLBSE reloaded, bigger and badder   Cheesy

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March 27, 2013, 02:30:55 AM
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It would be wonderful if TorBroker had trustworthy intentions AND were able to remain anonymous so as to prevent being shut down by the SEC. It is unlikely that they are both trustworthy and can remain anonymous, as I will explain.

On the question of being trustworthy and well intentioned, let's compare TorBroker to Silk Road, another anonymously run business that has proven to be trustworthy. Silk Road holds modest amounts of user funds for relatively short periods of time, whereas TorBroker is designed to hold large amounts of savings for long periods of time. This gives TorBroker a much greater incentive to take the money and run at some point. The ratio of funds held : future possible profits is much higher than Silk Road.

If they cannot remain anonymous, they will likely be shut down and depositor funds will be very much at risk. TorBroker states that they sell the bitcoins for dollars, deposit them in a brokerage account and purchase the underlying security. This is traceable activity subject to AML requirements and would be difficult to hide long term. Law enforcement could open TorBroker accounts, make trades and try to find the corresponding trades made through mainstream brokerages.

My guess is this is a scam and the plan is to take the money and run at some point, though I hope I'm wrong. 
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March 27, 2013, 02:47:44 AM
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Nah, you don't buy securities, you can only long / short them.

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March 27, 2013, 02:59:13 AM
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Nah, you don't buy securities, you can only long / short them.

Yes, you go long or short, but TorBroker trades the securities in the real world, which is a traceable activity not amenable to anonymity.

An excerpt from the original post:

4. Pick a security to long or short. At the next market opening, we will mirror your position on the real market.
5. Exit the position. At the next market opening, we will exit our position on the real market and credit your account with the resulting gains or losses.
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March 27, 2013, 02:08:59 PM
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On the question of being trustworthy and well intentioned, let's compare TorBroker to Silk Road, another anonymously run business that has proven to be trustworthy. Silk Road holds modest amounts of user funds for relatively short periods of time, whereas TorBroker is designed to hold large amounts of savings for long periods of time. This gives TorBroker a much greater incentive to take the money and run at some point. The ratio of funds held : future possible profits is much higher than Silk Road.

Holding large amounts of savings for long periods of time is one way to use our service but far from the only one. It is entirely possible to deposit today, enter a position for 1 day, and then cash out gains. With our upcoming support for leveraged trading this will be even more attractive.

In fact, from the general security principle of decentralization, we want to encourage customers to hold their own funds if they are not actively trading.

Also note that it is currently not possible to hold Bitcoin balances at TorBroker - all balances and positions are denominated in USD. If we wanted to build up a large amount of customer holdings to run away with, we would probably have allowed customers to keep balances in BTC, because our target segment is generally long BTC.

However, we think the most important argument for our trustworthiness is the transparency of our business model. With a 1% commission on all trades (with a current minimum of $10), it is simply much more profitable for us to run a long term sustainable business than to deceive our customers.

If they cannot remain anonymous, they will likely be shut down and depositor funds will be very much at risk. TorBroker states that they sell the bitcoins for dollars, deposit them in a brokerage account and purchase the underlying security. This is traceable activity subject to AML requirements and would be difficult to hide long term. Law enforcement could open TorBroker accounts, make trades and try to find the corresponding trades made through mainstream brokerages.

Even though the activity of TorBroker is in a grey zone because ownership of securities are never legally transferred from us to customers and thus not a subject for law enforcement to scrutinize, this is a very important issue to raise and something that we have thought extensively about and which we will address in the following way:

All activity in the regulated markets is registered and potentially subject to examination by suspecting regulatory parties. In order to prevent third parties from linking the trading activity at TorBroker to activity in the real markets, TorBroker will randomly split all orders up and execute these through different legal entities on different brokers. Significant activity also allows us to subtract opposite customer positions from each other, obfuscating even further the origin of our activity in the regulated markets.

In this way the trading activity of TorBroker will “show up” in the real market as an unintelligible and untraceable mosaic of transactions by various smaller entities. TorBroker has a huge vested interest in evading the potential wrath of regulators and we will carefully seek to minimize the systemic risks of our service.

TorBroker: Trade >1000 real stocks and ETFs and cash out in Bitcoin - BitcoinTalk - TOR Website
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April 03, 2013, 03:43:09 PM
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I've been predicting this kind of thing would happen for a long long time (https://bitcointalk.org/index.php?topic=7985.0)

Good luck to you!

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April 03, 2013, 04:26:20 PM
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Very interesting, I can certainly see an advantage.

My curiosity is simply in how the taxes would work since when you normally sell a stock for cash you pay large capital gains taxes, as much as 40% for short term. If you are selling for bitcoins though you wouldn't have to necessarily.

The legal risk for the people operating this is massive though. At a 1% commission right now it is a -EV game, in the future this could be quite promising.

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April 05, 2013, 01:11:17 AM
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I don't know TorBroker or any of the people behind it,  but about a month and a half
ago they contacted me,  and at least one other well known member of the
Bitcoin community and asked us to publicly hold 1,000 BTC as a security
bond that would be used to refund customers if TorBroker ever disappeared
with their customers money.

While I fully support TorBroker's efforts to bring additional economic
freedom to traditional financial markets,  legally it didn't seem safe
for me to be the front man for this.

The fact that they were looking for someone to hold this bond seems to
be a strong indication that they are in this for the long term,  and do not
intend to disappear with everyone's money.
If the regulators are able to uncover the true identities of the
TorBroker accounts,  I am sure that they (the regulators) will steal everyone's money though.

I wish TorBroker the best of luck,  and financial tyrants the worst.

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April 05, 2013, 01:18:47 AM
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While I like and support this venture my intuition and common sense will not allow me to deposit any money, especially considering the amount of people / companies on these forums that turned out to be scammy, despite having their identities known by the community and being in possession of impeccable reputation. Nonetheless, I wish you good luck.
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April 05, 2013, 10:54:45 AM
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I don't know TorBroker or any of the people behind it,  but about a month and a half ago...

Thank you for sharing this!

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April 05, 2013, 01:24:22 PM
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I don't know TorBroker or any of the people behind it,  but about a month and a half
ago they contacted me,  and at least one other well known member of the
Bitcoin community and asked us to publicly hold 1,000 BTC as a security
bond that would be used to refund customers if TorBroker ever disappeared
with their customers money.

While I fully support TorBroker's efforts to bring additional economic
freedom to traditional financial markets,  legally it didn't seem safe
for me to be the front man for this.

The fact that they were looking for someone to hold this bond seems to
be a strong indication that they are in this for the long term,  and do not
intend to disappear with everyone's money.
If the regulators are able to uncover the true identities of the
TorBroker accounts,  I am sure that they (the regulators) will steal everyone's money though.

I wish TorBroker the best of luck,  and financial tyrants the worst.


Thanks, Roger.

However, we disagree on the following:
 


Quote
If the regulators are able to uncover the true identities of the
TorBroker accounts, I am sure that they (the regulators) will steal everyone's money though.


Our lawyer has been in contact with the financial regulators in our local jurisdiction. He was given the information that at the moment there are no actual laws that explicitly forbid individual or company traders from passing on gains/losses to a third party that has no legal ownership of the traded securities. Furthermore, there is no regulation regarding deposits in unregulated currencies (bananas, seashells, bitcoins). However, they stated they would look negatively on such a service, but they wouldn’t be able to legally take action against it as is.

This means that they would have to change the legal framework before they could actually impede upon TorBroker’s activities. And even if they did change the regulation, the consequence would most likely be a fine to TorBroker and not a confiscation of customer funds. In the event of a change of legislation, TorBroker would alert customers.

We know that it will take time to build our reputation, but rest assured that we welcome any question regarding our service and are determined to prove to the community that we are in it for the long run.

TorBroker: Trade >1000 real stocks and ETFs and cash out in Bitcoin - BitcoinTalk - TOR Website
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April 05, 2013, 01:50:59 PM
 #15

What about taxes on short-term capital gains?

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April 05, 2013, 03:42:33 PM
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What about taxes on short-term capital gains?
Are you asking if you should pay taxes on your gains on TorBroker? That's a case between you and the tax authorities in your area that you choose to inform about your gains. It will vary depending on location and we can't advise on it.

Or are you asking if TorBroker is paying taxes on gains from customer positions in our accounts? Our accounts are in jurisdictions with no capital gains taxes, so we can pass on the full profit to our customers.

TorBroker: Trade >1000 real stocks and ETFs and cash out in Bitcoin - BitcoinTalk - TOR Website
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April 06, 2013, 02:52:40 AM
 #17

This actually seems like a pretty good execution of an interesting/dangerous idea.  Good luck to ya!
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April 06, 2013, 04:34:45 AM
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Kind of disappointed this service announcement has been relegated to the "Gambling" section.  Sad

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April 06, 2013, 10:49:14 PM
 #19

If these guy's have 1,000BTC to put up for insurance then they can also buy their own offshore fully legal brokerage/securities trading financial services company and do this on clearnet. Nothing illegal about anonymous directors running a brokerage service in Belize, Panama, Seychelles, or even New Zealand if you have a local employee there. As long as you are licensed in that country you can operate. Hell you could operate a legal brokerage out of Liberia.

also... that site also looks awfully similar to bitcoin24, and since one of them 'coded financial trading engines' cat is clearly out of the bag.
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April 06, 2013, 11:51:07 PM
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This is really good for insider trading. Gordon Gekko is pleased.
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