btc-arbs.com - Update: dead HYIP, Refund progress: BTC-arbs still doing refunds

[nightengale]

Deposited for the first time 4 days ago and successfully withdrew 3 days worth of profit, they processed the request in less than an hour.

Seems unlikely that a ponzi scheme would be concerned with implementing 2-factor authentication.

Am just concerned with all of the high-performance trading platforms coming online, that the profitability of arbitrage may be diminishing.

Am building confidence in this operating though.

@FreeJack2k2 -- are you PM'ing with Adam via BitcoinTalk or another medium?

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[FreeJack2k2]

Deposited for the first time 4 days ago and successfully withdrew 3 days worth of profit, they processed the request in less than an hour.

Seems unlikely that a ponzi scheme would be concerned with implementing 2-factor authentication.

Am just concerned with all of the high-performance trading platforms coming online, that the profitability of arbitrage may be diminishing.

Am building confidence in this operating though.

@FreeJack2k2 -- are you PM'ing with Adam via BitcoinTalk or another medium?

Just via the site's support/feedback tool. He's always responded to my questions, there.

I'd be more worried about the legitimacy if they were always delivering great returns and it wasn't so closely tied to market conditions and their cash movement, but it matches up with what the market's doing almost every time...and when it happens like today, where it's lower than you might expect, it's because their cash is tied up in wire transfers. It's happened multiple times since I've been a member there. They try to get the maximum out of an arbitrage chance which means they spend all the cash reserves, then they have to either wait until Bitcoin's price is close to even on the two major exchanges to move money back, or they wait longer for wire transfers. Because it's anonymous, there is always a risk that they'll shut down at any given moment...but that chance also exists with BTC-e, Vircurex, etc...etc... And honestly, if I were the one doing this, I don't know that I'd want to be broadcasting my activities or earnings to the world, either. I'd have the tax man banging on my door the next day.

[dyask]

I had a deposit wasn't done at the 8 hour mark so I opened a support ticket.  Adam took care of it, but I wasn't over impressed by the cookie cutter response I got explaining that bitcoin deposits can take time.   (I was at 46 confirmations when I put in the support ticket and there were a bunch of long blocks that day.)

My questions, as anyone got a response from anyone other than Adam?

[Qwiner]

I had a deposit wasn't done at the 8 hour mark so I opened a support ticket.  Adam took care of it, but I wasn't over impressed by the cookie cutter response I got explaining that bitcoin deposits can take time.   (I was at 46 confirmations when I put in the support ticket and there were a bunch of long blocks that day.)

My questions, as anyone got a response from anyone other than Adam?

Have U read the 1st post of this thread under the heading DEPOSITS?

I would recommended to refer to Post #35 - 37 + #59.

Did U miss this step: like Kirchwin did? >> Deposit and do nothing?
Did U go back to the site & click confirm? >> U must do this @ btc-arbs.com

[dyask]

I had a deposit wasn't done at the 8 hour mark so I opened a support ticket.  Adam took care of it, but I wasn't over impressed by the cookie cutter response I got explaining that bitcoin deposits can take time.   (I was at 46 confirmations when I put in the support ticket and there were a bunch of long blocks that day.)

My questions, as anyone got a response from anyone other than Adam?

Have U read the 1st post of this thread under the heading DEPOSITS?

I would recommended to refer to Post #35 - 37 + #59.

Did U miss this step: like Kirchwin did? >> Deposit and do nothing?
Did U go back to the site & click confirm? >> U must do this @ btc-arbs.com

I didn't miss a step, just seems like they are getting really slow.   I have another now that is up to 24 confirmations and I hit the confirm button at 2 confirmations.

Anyway that is why I was asking if anyone dealt with anyone other than Adam.   The FAQ says they have 10 people, I was just wondering if that is true. 

[jettico]

Always got responses from Adam only as well.

But shhh, don't say here that there might be noone but him in btc-arbs. I had to delete all my posts because OP considered such allegations too imprudent for this thread

[ferguson]

Who knows what kind of twisted games people are playing. 2 Factor Authentication may just be a small way "Adam" draws more people in.
Maybe FreeJack is Adam, smoothing us over with - "maybe or maybe not" - sorry FreeJack if you are not "Adam".
At least Adam is not holding conference calls, doing videos, telling us he is doing this because he wants to help the hungry children of the world.
The fact that his name is Adam concerns me for historical reasons.
What is up with STP? Is it true he can only take in 250 dollars a day in deposits?

[dyask]

Who knows what kind of twisted games people are playing. 2 Factor Authentication may just be a small way "Adam" draws more people in.
Maybe FreeJack is Adam, smoothing us over with - "maybe or maybe not" - sorry FreeJack if you are not "Adam".
At least Adam is not holding conference calls, doing videos, telling us he is doing this because he wants to help the hungry children of the world.
The fact that his name is Adam concerns me for historical reasons.
What is up with STP? Is it true he can only take in 250 dollars a day in deposits?

Let's call Adam & FreeJack two people.  At least that is something.    The FAQ also said you would "meet" most of them as a member.   So I'm just wondering.   

[nightengale]

Let's see if I can draw a shill label as well.

I haven't yet read about a single instance of malfeasance by btc-arbs. Deposits are posting, variable daily income is being accrued and withdrawals are coming out.

The guy says he implements 2-factor at the request of users and now people are saying its just further elaboration of a larger scam.

I realize we have to be hyper-sensitive about scams, but btc-arbs isn't being pushy or sleazy in how they attract clients and so far have not misrepresented their business model or stolen anything.

Can we bear these facts in mind as well as the discussion progresses? I could be way off and totally lose my funds with them tomorrow, but as of today I have absolutely no tangible evidence to expect that will happen.

[Rannasha]

I haven't yet read about a single instance of malfeasance by btc-arbs. Deposits are posting, variable daily income is being accrued and withdrawals are coming out.

Which is true for any Ponzi scheme until it collapses.

The guy says he implements 2-factor at the request of users and now people are saying its just further elaboration of a larger scam.

Implementing 2FA doesn't prove anything one way or the other. It's not very difficult to implement.

I realize we have to be hyper-sensitive about scams, but btc-arbs isn't being pushy or sleazy in how they attract clients and so far have not misrepresented their business model or stolen anything.

Can we bear these facts in mind as well as the discussion progresses? I could be way off and totally lose my funds with them tomorrow, but as of today I have absolutely no tangible evidence to expect that will happen.

BTC-Arbs.com has not shown a single piece of evidence that there's actual trading going on. No contact information (other than email) either.

The results they post are simply too good to be true. They claim to have 10 people working for them out of a Geneva office. Just add up the costs for such an operation, in one of the most expensive cities in the world. Then consider that a 2% difference in exchange rates between different exchanges doesn't mean a 2% profit. Since you need both fiat and BTC to make the arbitrage-trade, your profit is already down to half that of the price-difference. Then you need to keep reserves of both fiat and BTC on all exchanges, while not all reserves are used every day.

Often price-differences are predominantly one-way: For example, BTC-e is almost always cheaper than Bitstamp. So it is necessary to wire USD from Bitstamp to your bank account and onward to BTC-e, which can easily take over a week. So a large part of the funds is sitting inactive or is locked up in wire-transfers. The price-difference required to achieve the stated results is several times higher than the actual profit figure. And that's not counting all their operational expenses.

While this Ponzi scheme is more sophisticated than most, by providing a believable backstory (arbitrage trading is legit and can make you some money, I know from experience) along with daily reports, but in the end the numbers just don't add up. The claimed profits are far too high. And why would a legitimate company making these amounts of profits after deducting the costs of 10 employees and a Geneva-office be seeking tiny investments from random internet-people? Regular investors and VCs should be jumping on such an opportunity and for a company those investors would be far more preferably, since you get a large sum in one go without having to fuss about with deposits and withdrawals all the time.

Avoid!

[nightengale]

Avoid!

Your opinion has been noted for the record. Please feel free to move along.

[Rannasha]

Avoid!

Your opinion has been noted for the record. Please feel free to move along.

So no reply to my actual comments then? I'll take that as an acknowledgement of my views.

[nightengale]

Avoid!

Your opinion has been noted for the record. Please feel free to move along.

So no reply to my actual comments then? I'll take that as an acknowledgement of my views.

I have to admit that you sound like you know a whole lot more about the arbitrage process than I do. Note, I say you "sound" like you do because I can't verify whether your assertions are accurate. I would imagine that volume of funds available, timing, and the mechanisms of moving fiat are vital to the success of this type of operation, but I flatly just don't know. I do know that SecondMarket has an 11-person trading team dedicated to Bitcoin. I doubt they would incur this expense if there were not some profit in arbitrage trading. And I've acknowledged that btc-arbs could be a total scam and I will lose all of my funds tomorrow...

...But... You've given us your assessment of their business model, and since you're not interested to participate in their operation, that's really all you have to contribute here. That's why I suggested that you move along. I'm going to periodically update the thread with my experiences because I'm invested in this operation, but you've said your peace and really don't have a reason to continue to participate in the thread.

[FreeJack2k2]

LOL no I can assure you, I'm not Adam...but I can confirm too, that he's the only guy I've ever had an answer from there and from the results page yesterday, he is "Lead Administrator." I am guessing that if he has anyone else working with him, they're other traders...but it wouldn't surprise me if he was doing it solo, either. Saying they have 10 employees is something that nobody could confirm, but makes them look "bigger." He is, after all, trying to get investors to back his arbitrage efforts.

I personally don't doubt that he actually is doing arbitrage, but I think other things are open to speculation. As long as everything appears to be on the up and up with results and payouts, I'm okay. Nobody REALLY knows who runs BTC-e either, just the first names of a couple of Russian guys...but that doesn't stop it from being an extremely popular and trusted exchange.

Also, regarding the Bitcoin deposits - I added some the other day and it took a few hours longer than the last couple of times, but I think it depends on what time you do it...because I suspect that it's credited to you manually, I don't think it's an automated process. Your Bitcoin isn't actually sitting in a wallet somewhere, it's being used in arbitrage trading...so they're just adding numbers to your account balance, but your Bitcoin is out there on exchanges, working.

As for the "office in Geneva" comment someone else made...they said they will invite "VIP Investors" to a monthly cocktail party in Geneva, not that their office is there. They claim the office is in "Switzerland." They could be doing this out of their apartment, all they REALLY need are computers. To be honest, I don't much care if it's in their bedroom or a fancy office, I care about their ability to make these trades work.

And whether they actually do these cocktail parties is irrelevant, because I doubt anyone is investing 200 Bitcoin and if they are, hell...I'd throw a cocktail party in Geneva just for THEM. lol

[FreeJack2k2]

The results they post are simply too good to be true. They claim to have 10 people working for them out of a Geneva office. Just add up the costs for such an operation, in one of the most expensive cities in the world. Then consider that a 2% difference in exchange rates between different exchanges doesn't mean a 2% profit. Since you need both fiat and BTC to make the arbitrage-trade, your profit is already down to half that of the price-difference. Then you need to keep reserves of both fiat and BTC on all exchanges, while not all reserves are used every day.

Often price-differences are predominantly one-way: For example, BTC-e is almost always cheaper than Bitstamp. So it is necessary to wire USD from Bitstamp to your bank account and onward to BTC-e, which can easily take over a week. So a large part of the funds is sitting inactive or is locked up in wire-transfers. The price-difference required to achieve the stated results is several times higher than the actual profit figure. And that's not counting all their operational expenses.

The price difference yesterday was always at least $15-20 and they posted .5% returns. The reason for this is, they didn't have fiat in BTC-e at the time, to take advantage...presumably because of fully taking advantage of an opportunity on Tuesday. So they had to wait on wire transfer of funds back to BTC-e and missed the chance yesterday. Many days, they report having earned most of their gains from the smaller exchanges, like Kraken and Vault of Satoshi. So far this month, they have only cracked 2% twice. That's not "unbelievable" gains from arbitrage trading. They're great gains in comparison to any savings account you can find, though.

Also, they do take advantage of days where the major exchanges have price parity, to rebalance their accounts by transferring Bitcoin between them and avoid the delays and costs of wire transfers.

[dyask]

BTC-Arbs.com has not shown a single piece of evidence that there's actual trading going on. No contact information (other than email) either.

This point I agree with.   It seems they could post something.

The results they post are simply too good to be true. They claim to have 10 people working for them out of a Geneva office. Just add up the costs for such an operation, in one of the most expensive cities in the world. Then consider that a 2% difference in exchange rates between different exchanges doesn't mean a 2% profit. Since you need both fiat and BTC to make the arbitrage-trade, your profit is already down to half that of the price-difference. Then you need to keep reserves of both fiat and BTC on all exchanges, while not all reserves are used every day.

The results so far have been consistent with their story and strategy.    So far there few days that they return around 2%.   Typically the yields are around 1% or less.   For example yesterday was a .5% day which I easily beat with my scrypt mining.   

Often price-differences are predominantly one-way: For example, BTC-e is almost always cheaper than Bitstamp. So it is necessary to wire USD from Bitstamp to your bank account and onward to BTC-e, which can easily take over a week. So a large part of the funds is sitting inactive or is locked up in wire-transfers. The price-difference required to achieve the stated results is several times higher than the actual profit figure. And that's not counting all their operational expenses.

Some visibility into their cash/BTC management would be beneficial to showing if the operation were legit or not.   However your argument too is also largely hand waving probably based on some negative experiences.    While our accounts are divided into BTC/fiat, we don't have any idea how much BTC as been converted into fiat at any given time.    BTC is much faster to transfer than fiat.   They also talk about using minor exchanges too, but it isn't clear what those are.     Too many unknowns to say anything for sure.     Lack of visibility though is a valid concern.   

[nightengale]

Yesterday morning I created a support request, asking if btc-arbs would be willing to have a limited presence on BitcoinTalk to address some of the concerns outlined here, or if someone affiliated with the organization would be willing to meet with a trusted member of the community to discuss some of their operations. Adam responded that they would "consider" doing so in the future. This was a much less meaningful answer than I'd hoped for, and I don't think I'm willing to make any more deposits there until something gives. Just thought I'd share.

[Rannasha]

The results they post are simply too good to be true. They claim to have 10 people working for them out of a Geneva office. Just add up the costs for such an operation, in one of the most expensive cities in the world. Then consider that a 2% difference in exchange rates between different exchanges doesn't mean a 2% profit. Since you need both fiat and BTC to make the arbitrage-trade, your profit is already down to half that of the price-difference. Then you need to keep reserves of both fiat and BTC on all exchanges, while not all reserves are used every day.

The results so far have been consistent with their story and strategy.    So far there few days that they return around 2%.   Typically the yields are around 1% or less.   For example yesterday was a .5% day which I easily beat with my scrypt mining.  

I agree that their story and results match decently with the price development on the exchanges. However, this doesn't really mean much. It takes a few minutes every day to look at price charts and make up a nice story.

And while their claimed results vary in vague proportion with the volatility of the BTC price that day, the absolute value of their results are still far too high, because of several factors I've indicated before.

Often price-differences are predominantly one-way: For example, BTC-e is almost always cheaper than Bitstamp. So it is necessary to wire USD from Bitstamp to your bank account and onward to BTC-e, which can easily take over a week. So a large part of the funds is sitting inactive or is locked up in wire-transfers. The price-difference required to achieve the stated results is several times higher than the actual profit figure. And that's not counting all their operational expenses.

Some visibility into their cash/BTC management would be beneficial to showing if the operation were legit or not.   However your argument too is also largely hand waving probably based on some negative experiences.    While our accounts are divided into BTC/fiat, we don't have any idea how much BTC as been converted into fiat at any given time.    BTC is much faster to transfer than fiat.   They also talk about using minor exchanges too, but it isn't clear what those are.     Too many unknowns to say anything for sure.     Lack of visibility though is a valid concern.  

I have no experiences, negative or positive with BTC-Arbs. My arguments are based on my own experiences with arbitrage-trading, for which I have developed a simple bot that gets me a small amount of money every now and then.

Regarding your comment on BTC conversion to fiat: This assumption is inconsistent with the reported results. As you correctly mention, BTC is much faster to move around than fiat (~1 hr versus several days to >1 week), so for maximum efficiency, an arbitrage operation would need many times the amount of actual fiat than the fiat-value of their BTC stash. Since it is highly probable that BTC-Arbs gets more BTC investments than fiat investments (arguments: 1) BTC is much easier to invest, the threshold is much lower for BTC transfers. 2) Since the site claims to deal in BTC-trading it will appeal to BTC users primarily.), BTC-Arbs should have a large short position in BTC due to BTC investments being converted to fiat to optimize the efficiency of the operation.

A long term short position in BTC is extremely risky, considering the long term price trend of BTC (which is: to the moon!). Additionally, such a short position would be reflected in the daily results, since a large drop in the BTC price should give a large spike in the profit and vice versa. On days where BTC is going up by a few % or more, negative profits are quite probable. Yet we never see a day of negative profit on BTC-Arbs. It also defeats the entire purpose of arbitrage, risk-free profits, to take such a large position with invested money. In theory, the risk can be hedged by buying BTC/USD call options, but the high volatility of BTC/USD means that the price of these options is rather high and the cost of such a hedging strategy would eliminate most if not all of the profits from the actual arbitrage trades. And even with a perfectly delta-zero hedged position, it is very unlikely to never see a day without losses.

So with the information given by the BTC-Arbs website, the conversion of investments from BTC to fiat can be excluded with extremely high levels of certainty. Which brings me back to my original conclusion that most of the invested BTC is just sitting idle, since the operation (if it were legitimate) would be heavily bottlenecked by fiat movements.

If I were to run an arbitrage operation that took investments, I would not offer the same profits for BTC as I would for fiat. Instead, the profit offered would depend on how much the specific currency is bottlenecking the operation. And to protect the interests of previous investors, I would close down investments in one of the currencies (most likely BTC) if the operation becomes severely fiat bottlenecked and additional BTC investments no longer increase profit potential and instead just dilute the profits.

Yesterday morning I created a support request, asking if btc-arbs would be willing to have a limited presence on BitcoinTalk to address some of the concerns outlined here, or if someone affiliated with the organization would be willing to meet with a trusted member of the community to discuss some of their operations. Adam responded that they would "consider" doing so in the future. This was a much less meaningful answer than I'd hoped for, and I don't think I'm willing to make any more deposits there until something gives. Just thought I'd share.

You can tell Adam that since I live very close to their "monthly office cocktail parties in Geneva", I'd be happy to witness their operation ^^

[Alley]

I'm also committing a max of .5 btc until I get some more evidence this is an actual company.  If we got more communication and transparency I'd drop at least 5 coins into this investment if its legit. 

[paulma78]

I agree with everything you said Rannasha, but for the management of Fiat Currency, the only way to avoid being short is to use CFD Bitcoin. Ad example Forex-Metal offers CFD with a lever 3 and commissions of 0.5%. I do not know if it might be possible, but it is an idea. it is also true that transfer to btce costs 1%, and in addition there are fees for the purchase and sale, then where is their gain? I remain skeptical or at least surprised by so great profit.