Quote from: Esh on October 15, 2013, 10:12:54 AM

If I'm following you correctly, you seem to be suggesting the use of a single Paypal transaction in order to establish the identity of investors in the proposed private fund, and that you intend this to be some kind of nominal fee with the substantive transactions taking place in Bitcoin later on?

Yes, the fee aspect would be deliberately inconsequential -- just a small charge to become a member of a site for a specific period of time. The important aspect would be to establish that Person A who has just become a member of the site is really Person A, according to PayPal.

Quote from: Esh on October 15, 2013, 10:12:54 AM

If so then, in and of itself, that sounds fine (I am not so attached to my pseudonymity as others here, I suppose), but would you not then need to link the Paypal account to a Bitcoin wallet?

Once a person had become a member of a site, then anything else that needed to be done could be handled directly via that person's account on the site. (The idea is that this is done in connection with a payment flow that creates an account for the person on the site. This is something I do all the time with other PayPal-integrated membership sites in the health professions.)

Quote from: Esh on October 15, 2013, 10:12:54 AM

There have been some troubling accounts of Paypal freezing completely legitimate Kickstarter accounts in the name of anti-fraud/AML...

Yes, clearly that would be something to avoided, since it would shoot the whole thing to pieces.

Quote from: Esh on October 15, 2013, 10:12:54 AM

Beyond that, Paypal may not necessarily be sufficiently compliant with UK law...

Hopefully we can be reasonably confident that PayPal complies with the law in all countries in which it operates; if PayPal were found to be breaking the law in any of those countries, that would be rather a big deal, quite apart from any impact on us.

Quote from: Esh on October 15, 2013, 10:12:54 AM

To answer your primary question though, the idea of using Paypal for ID verification doesn't strike me as a deal-breaker persay. I certainly find it far more palatable than turning over copies of my passport, credit card and driver's licence to WeExchange (A totally outrageous suggestion, in my books. That's more than enough information to facilitate identity theft)...

Me too: it seems crazy to me to hand over all those details to a pseudonymous entity with zero accountability. I've verified many different accounts using scanned copies of identity documents, and on every single occasion except for two, those receiving the documents were happy to have a big 'CONFIDENTIAL' splashed across my signature and photograph, so that you could still see it was me and could still see it was my signature, but you would find it much harder to use it to create a convincing fake document. The two exceptions? One was Mt Gox, and the other is WeExchange. Well, Mt Gox lacks any kind of credible data protection or data retention policy, but WeExchange is so far below the standard of Mt Gox that it's not even funny.