[tg3]

AnchorUSD is our payment partner who operates the API we interact with (it's a custom API that they built for us).

The escrow account is held with a trust company in AnchorUSD's name, but is designed so that only the users they onboard can access the funds. Funds cannot be legally used for any other purpose.

[notyourday]

> The escrow account is held with a trust company in AnchorUSD's name,

That means the total FDIC insurance on all the money in all accounts is capped at $250K between all the users of your platform. One Bitcoin quoting at $10,288, means that at most money needed to buy 24.3 bitcoins are insured across the entire platform.

[mpoteat]

Personally, I don't expect FDIC insurance on swap space used for trading, or generally anything except my bank account.

[notyourday]

It is not about trading - customer's funds are deposited into a bank account of a US financial institution partner under under a name of a trust created by their service provider. Until those funds are "spent" they sit in that account. That account is FDIC ensured to $250k.

Compare this to you depositing money with your brokerage to trade stocks. The account is opened at clearing broker in your name, which means that the SPIC coverage limit is just yours.

[tg3]

Our partner has clarified that FDIC insurance is per user (per Tax ID) rather than for the whole platform

[notyourday]

I'm sorry, but your response is a strong indicator that anyone and everyone needs to stay as far away as humanly possible from your company in its current form because:

1) company's leadership does not understand how FDIC insurance works -- trusts have their own tax ID which are not customer's tax id. Trusts cannot currently be created in real time.

2) company's leadership does not know what they are getting from a "partner" -- some random person who ran a couple of companies and consulted for some financial institutions should not know more about what is and what is not possible than a leadership of a company in a space

3) there's a lack of understanding among the leadership what are the implications of customer account being insured by FDIC.

4) leadership does not understand that ACH credit has a liability attached to it which needs to be managed very carefully ( especially with points 1-3 )

5) In no even should the points 1-4 stand should a company ever trade from its own inventory to satisfy customer's order.

Drop whatever you are currently doing and immediately hire a compliance person from a large commercial bank that does not have any reason to leave his or her position i.e. overpay for one of 100-200 experts that exist in this field so you can at least ensure that you don't blow up in the most spectacular fashion with a potential criminal prosecution.

This is not an Uber or AirBnB. If you mess up you will create potentially criminal problems not just for yourselves but for your customers.

[evbots]

thank you for making this public, even though it may not be perfect.