Quote from: nightengale on March 14, 2014, 01:32:18 PM

I haven't yet read about a single instance of malfeasance by btc-arbs. Deposits are posting, variable daily income is being accrued and withdrawals are coming out.

Which is true for any Ponzi scheme until it collapses.

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The guy says he implements 2-factor at the request of users and now people are saying its just further elaboration of a larger scam.

Implementing 2FA doesn't prove anything one way or the other. It's not very difficult to implement.

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I realize we have to be hyper-sensitive about scams, but btc-arbs isn't being pushy or sleazy in how they attract clients and so far have not misrepresented their business model or stolen anything.

Can we bear these facts in mind as well as the discussion progresses? I could be way off and totally lose my funds with them tomorrow, but as of today I have absolutely no tangible evidence to expect that will happen.

BTC-Arbs.com has not shown a single piece of evidence that there's actual trading going on. No contact information (other than email) either.

The results they post are simply too good to be true. They claim to have 10 people working for them out of a Geneva office. Just add up the costs for such an operation, in one of the most expensive cities in the world. Then consider that a 2% difference in exchange rates between different exchanges doesn't mean a 2% profit. Since you need both fiat and BTC to make the arbitrage-trade, your profit is already down to half that of the price-difference. Then you need to keep reserves of both fiat and BTC on all exchanges, while not all reserves are used every day.

Often price-differences are predominantly one-way: For example, BTC-e is almost always cheaper than Bitstamp. So it is necessary to wire USD from Bitstamp to your bank account and onward to BTC-e, which can easily take over a week. So a large part of the funds is sitting inactive or is locked up in wire-transfers. The price-difference required to achieve the stated results is several times higher than the actual profit figure. And that's not counting all their operational expenses.

While this Ponzi scheme is more sophisticated than most, by providing a believable backstory (arbitrage trading is legit and can make you some money, I know from experience) along with daily reports, but in the end the numbers just don't add up. The claimed profits are far too high. And why would a legitimate company making these amounts of profits after deducting the costs of 10 employees and a Geneva-office be seeking tiny investments from random internet-people? Regular investors and VCs should be jumping on such an opportunity and for a company those investors would be far more preferably, since you get a large sum in one go without having to fuss about with deposits and withdrawals all the time.

Avoid!