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Author Topic: Open questions to Jered and Alan of Tradehill  (Read 4400 times)
Andrew Vorobyov
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July 31, 2011, 07:17:06 AM
 #21

I don't know how you do it in USA, but here in Israel it's illegal.. You can deposit only to your account ONLY. After this make transfers wherever you like.

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The_JMiner
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August 02, 2011, 03:32:52 AM
 #22

I don't know how you do it in USA, but here in Israel it's illegal.. You can deposit only to your account ONLY. After this make transfers wherever you like.

It many countries it is legal to deposit into someones else account and it is considered the norm in some countries (example: central/south america)

I mentioned this idea to Tradehill the ability to deposit say $100 at a local BofA. The bank gives you a deposit receipt (proof) and you can send it to Tradehill if anything.

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August 02, 2011, 03:36:02 AM
 #23

I know some landlords that give their tenants deposit slips and have the tenant deposit it in the banks directly. Very good protection for the tenant. Yes this is in the US. It is no problem at all to deposit money in someone else's account. I'm baffled that it's illegal.
Jered Kenna (TradeHill)
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August 02, 2011, 04:19:52 AM
 #24

I spoke with the bank in person today. It's completely legal and at first sounds like a great option. The banker admitted that occasionally the slip doesn't get put in the system and it can be very confusing. I do this all the time to pay for things in Chile but in the US it's not quite as efficient in reality. I'm speaking with additional banks tomorrow and would really like to offer this service. If at all possible we will immediately. If the risk is too high we will have to leave it off the list.

Additionally the blog has been updated and we're now sending out checks on request.

Jered

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August 02, 2011, 04:24:42 AM
 #25

I spoke with the bank in person today. It's completely legal and at first sounds like a great option. The banker admitted that occasionally the slip doesn't get put in the system and it can be very confusing. I do this all the time to pay for things in Chile but in the US it's not quite as efficient in reality. I'm speaking with additional banks tomorrow and would really like to offer this service. If at all possible we will immediately. If the risk is too high we will have to leave it off the list.

Additionally the blog has been updated and we're now sending out checks on request.

Jered

BoA and Wells Fargo are the ones to start with. Regions is big here in the South East.

Good luck!

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August 02, 2011, 05:18:39 AM
 #26

I know some landlords that give their tenants deposit slips and have the tenant deposit it in the banks directly. Very good protection for the tenant. Yes this is in the US. It is no problem at all to deposit money in someone else's account. I'm baffled that it's illegal.

You can probably also deposit into someone else's account through online banking if you can do it over the counter at a branch.  Here an online deposit to the same bank is instantly available, while a deposit to a different bank can take a couple of days to process.  Either way, there's no need to physically visit the bank.

Becoming a biller with a billpay platform would make things simple for exchange clients because they could deposit funds by phone, online or in person, but billpay schemes typically involve interchange fees for the billers who are part of the scheme.

I think one issue which has emerged is how different the banking systems are in the various places the exchanges do business. Things which are dead simple and low cost in one location are complex and expensive somewhere else.  There's no "one size fits all" solution for the issue of depositing and withdrawing funds to and from the exchanges. Implementing and maintaining different systems for different locations is going to be a serious pain in the ass and every extra step which is added to the process introduces another potential failure point. 

The exchanges need to stop rushing to market with half-assed bandaid solutions adopted on the fly and refrain from promising solutions until they're certain they can deliver.

All I can say is that this is Bitcoin. I don't believe it until I see six confirmations.
Jered Kenna (TradeHill)
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August 02, 2011, 05:54:03 AM
 #27

The biggest problem in the end for all of these things is fraud. If we accept these transfers we have to give our account numbers out and exchanges are extremely high value targets for fraud. If we can do it safely we'll do it. If we get a lot of fraud and run a completely legit business they can still shut us down though. It's a balancing act between ease of use and security.

Jered

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August 02, 2011, 06:00:25 AM
 #28

The biggest problem in the end for all of these things is fraud. If we accept these transfers we have to give our account numbers out and exchanges are extremely high value targets for fraud. If we can do it safely we'll do it. If we get a lot of fraud and run a completely legit business they can still shut us down though. It's a balancing act between ease of use and security.

Jered

I don't see how acccepting cash at the teller's counter to an account that is merely used as a feeder to your other account(s) could possibly fall victim to fraud. Just be sure that the depositor had a transaction number that can only be used one time to add those funds to his/her account. You will not be inventing the wheel here.

Feel like investing in a Miner?:
http://bitcointalk.org/index.php?topic=30044.msg377773#msg377773
A soup to nuts newbee system for a secure, portable USB wallet (free instructions):
NoobHowTo: http://bitcointalk.org/index.php?topic=27088.msg341387#msg341387
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August 02, 2011, 06:09:35 AM
 #29

The good part of being able to deposit into a bank is there are cameras. It's a nearly impossible to say " I deposited money to Tradehill but I didn't get credit" when they don't have a deposit slip and there is no video of them making the deposit.
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August 02, 2011, 06:15:33 AM
 #30

The good part of being able to deposit into a bank is there are cameras. It's a nearly impossible to say " I deposited money to Tradehill but I didn't get credit" when they don't have a deposit slip and there is no video of them making the deposit.

I think you're over-estimating the willingness of banks to make their security footage available to customers and third parties.  I also suspect that banks only keep their security footage for a very limited amount of time, just like other businesses.

All I can say is that this is Bitcoin. I don't believe it until I see six confirmations.
Jered Kenna (TradeHill)
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August 02, 2011, 06:40:56 AM
 #31

The biggest problem in the end for all of these things is fraud. If we accept these transfers we have to give our account numbers out and exchanges are extremely high value targets for fraud. If we can do it safely we'll do it. If we get a lot of fraud and run a completely legit business they can still shut us down though. It's a balancing act between ease of use and security.

Jered

I don't see how acccepting cash at the teller's counter to an account that is merely used as a feeder to your other account(s) could possibly fall victim to fraud. Just be sure that the depositor had a transaction number that can only be used one time to add those funds to his/her account. You will not be inventing the wheel here.

It's not so much the deposits that I'm worried about. It's publishing the account number and then getting online transfers from phished accounts and those getting pulled back. There are a few other scams that can be done which I'll discuss in private and I'm sure the scammers already know anyways. If we can manage the risk we'll do it, see what bank number #2 and #3 have to say tomorrow.

As far as deposits in person I'd love it.

The bank really really doesn't want us to just give out the account numbers.

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GeniuSxBoY
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August 02, 2011, 07:31:26 AM
 #32

Jered, I hope you have a $1000 withdrawl limit on your site.


Otherwise, someone who has all of Mybitcoin and Polands Bitcoins can wipeout your entire site.
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August 02, 2011, 11:02:51 AM
 #33

The bank really really doesn't want us to just give out the account numbers.

Setup a separate account specifically for deposits. This limits your risk, since your main account number(s) can remain hidden. Then it would simply be a process of transferring funds from the deposit account into your main account. Perhaps this process could be automated. If not, I assume it would be performed daily. The risk then would only be limited to the average daily balance in that account.

To further mitigate that risk, you could ask the bank to block all withdrawals/ACH from the deposit account. The only withdrawal that would be permitted, by anyone, would be transferring from that publicly facing account into the private main account.

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August 02, 2011, 11:54:11 AM
 #34

Why not use something like MoneyBookers?

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August 02, 2011, 04:49:10 PM
 #35

Why not use something like MoneyBookers?

PayPal and other such services are far too high-risk.

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August 02, 2011, 05:00:13 PM
 #36

Why not use something like MoneyBookers?

PayPal and other such services are far too high-risk.

Really? I know PayPal is risky, but I thought MoneyBookers didn't do chargebacks when we are talking simple "sending money to another MoneyBookers account"?

Guess I was wrong :/

edit: Why couldn't Tradehill give the possibility of withdrawing money to moneybookers? Unless Tradehill would demand a chargeback? But then they would be seen as fraudulent?

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August 03, 2011, 07:17:29 AM
 #37

If you send checks out of your business account each check will have the routing number and account number on it.

How is this different than giving out the account # so people can make cash deposits?

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August 03, 2011, 07:28:21 AM
 #38

Why couldn't Tradehill give the possibility of withdrawing money to moneybookers? Unless TradeHill would demand a chargeback? But then they would be seen as fraudulent?
1) I go to withdraw $1,000 from TradeHill using MoneyBookers. I have a zero balance with MoneyBookers.

2) A transaction I made through MoneyBookers three months ago gets reversed by a scammer. MoneyBookers now claims I have a negative balance and uses my TradeHill transaction to offset it.

3) I complain to TradeHill about not getting my $1,000. What do they say? "Sorry, we did our part. It's not our fault MoneyBookers stole your money. After all, you told us to send it to them."

If you find the excuse in '3' acceptable, then why wouldn't it have been acceptable for TradeHill to just take the thousands Dwolla reversed out of their Dwolla deposits? After all, TradeHill's customers sent that money to Dwolla. It's not TradeHill's fault Dwolla decided to use it to offset scammed transactions.

Any scheme that allows a scammer to steal their customer's money despite no fraud or funny business on the part of their customer is a poor choice for an exchange.

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August 03, 2011, 07:42:34 AM
 #39

Why not use something like MoneyBookers?

All of the payment processors associated with online poker have been under scrutiny by the US Department of Justice.  There's obviously a risk that those services may find their funds frozen as the online poker drama continues to unfold.

All I can say is that this is Bitcoin. I don't believe it until I see six confirmations.
Jered Kenna (TradeHill)
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August 03, 2011, 07:58:00 AM
 #40

About checks: They're coming directly from the bank, I'll confirm if the account / routing are on it but I don't believe so. Valid point though.

Frozen: If it's the same bank they (the ones I've spoken with) treat all accounts the same. If we have one account for wires (which is what we did in the past) and they have fraud concerns all the accounts will be effected. Banks are very careful with fraud and won't hesitate to act even if the fraud is coming towards us and not from us.

Moneybookers: obviously less risk outgoing and most likely we will do that. There is still some risk as JoelKatz pointed out but we're going to clarify that with them and would like to offer it soon.

Geniusxboy: I believe Polands BTC was deleted but I could be wrong. If the mybitcoin funds were stolen then this could be a possibility. We see large amounts of BTC come in and out daily for legitimate reasons though and with a withdraw limit they would still be able to manipulate the market on TradeHill or any other exchange to a degree. If they're trying to maximize the currency they can remove though it wouldn't make sense.

Jered

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