With the way I suggested, Tradehill would only use Dwolla to send money to its end users. This eliminates the risk of an end user doing what I described above since its not an option for funding your Tradehill account via Dwolla. It is impossible for an end user to fraud tradehill by getting money sent to them by Tradehill.
That can't happen until all the issues between TradeHill and Dwolla are resolved and Dwolla agrees to cover all losses from transactions before now.
Otherwise, TradeHill could send your $1,000 to Dwolla, go to send that money to you only to have Dwolla say, "Sorry, TradeHill, you can't send money to CubedRoot because you have a negative balance." Tradehill responses, "What? We had a zero balance and then sent in $1,000." Dwolla replies, "Yeah, you
had a zero balance, but then two transactions from two months ago were reversed. You now have a negative $1,500 balance.".
Exactly my thoughts.