CoinLenders Website Changes

[CurbsideProphet]

Initially I was going to do this via PM to TF but I think it's relevant to all users of CoinLenders so I decided to start a thread.  I noticed that there are some changes to the website, for instance, interest is now called "fee rebates."  I understand some of this is more or less CYA type of stuff and am okay with that but I did notice some omissions and additions that I would like to see addressed.

The first is the removal of the "deposit guarantee" from the FAQ section.  Obviously something like this cannot be insured by the FDIC, SIPC, etc.  However, previously the FAQ section mentioned that TF personally insures all deposits from loss but this is no longer there.  Why was this removed, do you no longer stand behind all deposits?

There is also this addition:

Important Notice: CoinLenders is not a bank or financial institution. This is not an investment, and CoinLenders does not solicit investments from anyone. CoinLenders is a fictional website operating for web development, entertainment and educational purposes only.

I'm okay with the first two sentences but the last one bothers me.  What exactly is a "fictional website?"  And why is it operating for ONLY web development, entertainment, and education when there are real loans and other investments being done?

For the record, I have had no issues with CoinLenders or with Trade Fortress.  He has made good on all of his commitments to me, so this is not a scam accusation.  I'm just a little concerned with some of the changes and would like to give him a chance to reply publicly.  Thanks.

[pedrog]

There is regulation in place for business who lend money for interest, and in the USA apparently bitcoin is money, well, if you have a fictional website... That's not against the law... I guess...

[🏰 TradeFortress 🏰]

This is pretty standard in the BTC investments world.

btct.co

Welcome to btct.co, the BTC Virtual Stock Exchange*

 * This is a virtual stock exchange using virtual currency. Virtual goods utilized on this site are for entertainment and educational purposes only.

BitFunder

    We (BitFunder) do not accept responsibility for anything.
    WARNING: Use at your own risk.
    You must agree to 1 and 2.

Cryptostocks

No Offer: The information contained in the Platform is just for informational purposes. No information published on Platform website constitutes a solicitation, an offer, or a recommendation to buy or sell into a funding opportunity, to effect any transactions, or to conclude any legal act of any kind whatsoever.

[pedrog]

See? No money here, we're just a group of friends playing with bits and bytes...

[favdesu]

See? No money here, we're just a group of friends playing with bits and bytes...

this. nothing to worry about then I guess

[ChaosFox]

Is there any kind of implicit or explicit guarantee over our "made-up, funny and completely virtual and useless" currency? That would be nice to know either way.

[FirstPrincipalBank]

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.

[Mooshire]

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.

No "may" about it.

[🏰 TradeFortress 🏰]

* Website Changes

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

Please see SEC v. SG, Ltd., 265 F.3d 42, particularly about how SEC did not challenge the virtual securities but only the specially noted "privileged company" which was noted as a security.

* Inverted yield curve

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

On the other hand, CoinLenders builds up more trust the longer we operate, and we can offer fee rebates to compensate for that.

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.

CoinLenders uses Inputs.io for Bitcoin payment processing. CL and Inputs' books are completely separate, as it should be.

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

CoinLenders does not invest a significant amount into collateralize private loans. Most of our loans are fully secured.

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

CL intentionally has no balance sheet to maintain a competitive advantage. You can see transparent reports every two weeks for BTCINVEST however.

[Pale Phoenix]

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

Of course it wouldn't stand up in court, but it is unlikely to end up there anytime soon. Everyone should know that most Bitcoin financial services are not compliant in many jurisdictions, and the whole sector is held together by an exciting, if risky, mix of trust and gut feeling.

This allows for tremendous returns, but it's not for the weak at heart because the risks are substantial, yet largely unquantifiable. If you are looking for security, keep your money under your pillow or in an FDIC insured bank, where the return is roughly equivalent to the pillow.

Speaking of trust, one way NOT to build it is to come into a competitor's thread with a critique that doesn't address the risks of your own service.

[FirstPrincipalBank]

Speaking of trust, one way NOT to build it is to come into a competitor's thread with a critique that doesn't address the risks of your own service.

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.

[CurbsideProphet]

This is pretty standard in the BTC investments world.

btct.co

Welcome to btct.co, the BTC Virtual Stock Exchange*

 * This is a virtual stock exchange using virtual currency. Virtual goods utilized on this site are for entertainment and educational purposes only.

BitFunder

    We (BitFunder) do not accept responsibility for anything.
    WARNING: Use at your own risk.
    You must agree to 1 and 2.

Cryptostocks

No Offer: The information contained in the Platform is just for informational purposes. No information published on Platform website constitutes a solicitation, an offer, or a recommendation to buy or sell into a funding opportunity, to effect any transactions, or to conclude any legal act of any kind whatsoever.

Appreciate the reply.  Do you still personally stand behind all deposits as previously stated on the website? 

[StreakfortheBTC]

If anyone thinks these wording will stop a site from the authority of SEC or the US to come after them, you are sadly mistaken.  They are not retarded.

[001sonkit]

If anyone thinks these wording will stop a site from the authority of SEC or the US to come after them, you are sadly mistaken.  They are not retarded.

If a method is still not being break why not give it a try. See with no "virtual" rules like Trendon T. Shavers did, you are considered as VIP to the US govt., visit to court plus lifetime food supply in jail, all for Free.

You are true on lawyers are not retarded, but sadly, the laws that already set down are blind, they are supposed to work as what they written.

Oh by the way, if you had some childhood, you'd know there is a site called neopets, and what is happening there could probably apply here.
Instead of Bitcoin, they are Neopoints. They issue neopoints (thru games), you can buy neopoints, there are banks that give you interest on there, there are virtual stock exchange for neopoints... hosted in US and running for over 10 years.

TF: BTW your BitFarm idea few weeks ago is a good one to consider to making it more fictional