I didn’t understand what the word "doesn't hold your funds" means, if your platform supports/acts_as escrow, it need to manage/control that funds.
What is the address/located of that company?

I do not know about the legal status of this, but I do not expect it to remain in the future.
EDIT:  Your site works as Binance platform, you can use it without verification, but you need to verify it to bypass the restrictions.
Source: https://hodlhodl.com/pages/faq#are_there_any_limits_for_a_user_on_exchange

ETH is now more common than Litecoin, why you support it?

Good movement