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Author Topic: Would you invest in BitCoin fund?  (Read 1968 times)
Goomboo
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January 20, 2012, 09:06:49 PM
 #21

Hey Ultima,

I've looked at your operations and I do have a few problems:

1.  This is illegal.  You are acting as a pass-through entity to allow individuals who are not approved for certain asset classes to invest in them.
2.  You don't publish your positions.

Cool idea, but it's illegal

(I have a BA in Finance and working on the MS in Finance, so I'm not just making this up :p)
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Twister Trojan
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January 20, 2012, 09:15:44 PM
 #22

I'm thinking of opening a BitCoin fund. The fund would trade bitcoins, publicly traded options and ETFs. It would give people a chance to earn some interest on their bitcoins (and me a chance to earn some fees Smiley.

Deposit and withdrawals would be instant (just like mtgox and other exchanges), no time/amount limits. Would you trust a few cents to a complete stranger?

Don't take this personally, but no thank you, I can do all that myself and like it that way because if it doesn't go well, I have no one to blame but myself Smiley
is4tomj
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January 21, 2012, 03:22:26 AM
 #23

Goomboo may be correct, but there are bigger legal issues here that I don't see addressed either.  I don't see documentation regarding whether Ultima is a registered broker dealer or financial advisor.  According the Securities Exchange Act of 1934 all broker-dealers are required to be registered with the SEC.  Some foreign broker-dealers have tried to skirt the issue by trading on a foreign exchange, however, the "Guide to Broker-Dealer Registration" published by the SEC clearly states in that a broker-dealer is required to be regulated and registered with the SEC if the a broker-dealer is 1) physically operating within the US, 2) is attempt to induce securities transaction in the US, or 3) use any means or instrumentalities of interstate commerce must register with the SEC as a broker-dealer.

Number 3 is particularly important, the phrase "instrumentalities of interstate commerce" is the phrasing that has been used by the US Supreme Court in countless cases, granting plenary power to the US Federal Government (specifically congress) enumerated in the US Constitution.  The US Congress has plenary power to regulate all commerce within the US boarders and US citizens.

I am currently writing a more in depth article on this tomorrow, which I will post.  My intent is merely to recount both statutory and case law around regard financial services related to bitcoin.  I will not apply the law to Ultima's specific set of facts.

On a common sense note, why would any body be so stupid as to invest with Ultima??  If a broker-dealer won't disclose her identity, then why would you give her your money?  The more I look at Ultima's site, the stronger it reeks of fraud!  Someone should report this guy to the forum admins, we don't want this kind of trash around scamming people.

http://BitcoinTitan.com - Visualizations of the Bitcoin Markets and Exchanges
Goomboo
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January 21, 2012, 03:35:26 AM
 #24

I would like to throw out an investment alternative to everyone on here which offers better / legal returns and IS registered with the National Futures Association and the Commodity Futures Trading Commission:

www.currensee.com

Ultima, you may have pure and noble motives, but I suggest you become a registered CTA (Commodity Trading Advisor) prior to soliciting funds from this already battered community.
is4tomj
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January 21, 2012, 03:52:47 AM
 #25

Oh darn, Goomboo, I was hoping that link was going to a BTCUSD firm.  Have you found any legit investment funds trading BTC yet?

http://BitcoinTitan.com - Visualizations of the Bitcoin Markets and Exchanges
Goomboo
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January 21, 2012, 04:04:28 AM
 #26

Oh darn, Goomboo, I was hoping that link was going to a BTCUSD firm.  Have you found any legit investment funds trading BTC yet?

Nope, and I don't see a reason to do so.  There isn't enough volume in this market to earn a respectable return on a respectable amount of capital.  If you are trying to invest, I seriously suggest growing your "real money" through a legal venue until BTC becomes a more liquid instrument.  Bitcoin trades at BEST, what?  $1,000,000 per day?

The futures market for the EUR/USD trades about $66 billion per day
http://www.cmegroup.com/trading/fx/g10/euro-fx_quotes_globex.html

While the spot market for EUR/USD trades over a trillion dollars per day
http://en.wikipedia.org/wiki/Foreign_exchange_market

coinft
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January 21, 2012, 07:51:44 PM
 #27

Oh darn, Goomboo, I was hoping that link was going to a BTCUSD firm.  Have you found any legit investment funds trading BTC yet?

Nope, and I don't see a reason to do so.  There isn't enough volume in this market to earn a respectable return on a respectable amount of capital.  If you are trying to invest, I seriously suggest growing your "real money" through a legal venue until BTC becomes a more liquid instrument.  Bitcoin trades at BEST, what?  $1,000,000 per day?

The futures market for the EUR/USD trades about $66 billion per day
http://www.cmegroup.com/trading/fx/g10/euro-fx_quotes_globex.html

While the spot market for EUR/USD trades over a trillion dollars per day
http://en.wikipedia.org/wiki/Foreign_exchange_market


These are among the most liquid markets world wide. Taken these requirements, you can't trade even well respected stocks. And many established small commodities trade below BTC/USD volume.

Also your definition of legal seems to depend on US law. It wasn't mentioned where the fund is located, and legality may depend on client location too.

You may be a professional, and this may make you blind to new dynamics in upcoming developments. I am not immune to this myself, in the field of IT.

*Trust* is a much more universal deterrent to investing here, and one why I would not consider this.

-coinft.

is4tomj
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January 22, 2012, 04:51:21 AM
 #28

I am currently writing a more in depth article on this tomorrow, which I will post.  My intent is merely to recount both statutory and case law around regard financial services related to bitcoin.  I will not apply the law to Ultima's specific set of facts.


http://blog.tradingtitan.com/post/16271054719/can-the-us-regulate-bitcoin-brokers

http://BitcoinTitan.com - Visualizations of the Bitcoin Markets and Exchanges
Kettenmonster
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January 27, 2012, 09:18:15 PM
 #29

I'm thinking of opening a BitCoin fund. ...

You add one level of complexity by adding another currency into the equations regular funds have to solve.
Sorry, but my brain is too small to grasp the brilliance in that approach.

The paining (sic!) is done with the QPainter class inside the paintEvent() method.
(source: my internet)
EnergyVampire
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January 28, 2012, 02:59:58 AM
 #30

I like the idea of a BTC fund if full disclosure is part of the deal. Right now this reminds me of the "Investment Funds" at Eveonline.  Grin

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