Quote from: urwhatuknow on March 17, 2014, 01:30:51 PM

Quote from: aragalie on March 17, 2014, 05:38:11 AM

BFX team, i'm sorry for having to criticize but you guys are making some very brusque moves with apparent nonchalance.

1- Introduction of a "0.10% fee on all withdrawals and deposits" is a major milking of the Lenders, as i'm basically paying you 0.2% for a round-trip of deposit+withdrawal, for basically the exact same service? There's no risk for you, just paying the salary of a person who reconciles bank accounts. Don't you find this new fee a bit excessive?

2- 50% increase of the fees for Swap Liquidity providers....i understand that you might want to take a bigger part of the cake, but seriously, 50% hike with one simple email?

3- "Effective insurance of swaps" is a term that sounds very fishy, like the banks telling us they are using the best "risk assessment tools" and then going bankrupt when the first big crash happens. Please be so kind and explain to us how are you "effectively" insuring the swaps? It's like being pregnant: you either are or you aren't...you can't be "effectively" pregnant....

And i would like to stress on this point. If you have indeed found a financial institution willing to insure 16+ million dollars, please share with us the good news. Otherwise, if you are just relying on your ability to halt trading fast enough, or if you have a rich investor who "promised" to bear some of the losses, then we should know. That's a beaten path to getting a Black Swan event and wiping us all out. And the reasoning you are using to justify this increase is a Straw-man argument; what's the connection between your "reserves" (which for an un-audited company can mean anything) and the insurance you say you're providing?

You're a private company and can do whatever you like in this unregulated market, especially now with Mt. Gox gone. I can appreciate that, and the fact that you're just telling us about the changes and not consulting us at all (which is your right). Even so, i find this latest email a bit offensive in terms of the rate of fee hikes.

Should we expect another email in May with a 100% increase in the fees due to "effective" changes?

the recent changes were not meant to scam anybody or to sound fishy.
What we meant by insuring ( probably I didn't choose the right words for it) is that Bitfinex would have stood behind losses with the full power of its (limited) reserves.
This is by the way much less than the total amount of swaps currently stipulated ( more or less 10% of it).
I understand some people might not be satisfied with the current setup and I will think about your critics for the next days.
You might be right, for Bitfinex taking up so much liability for an extra 5% cut on swaps doesn't make much sense either.

This is the prove that in life no good deed goes unpunished.

Will keep you posted about it

Have a good day

Giancarlo
Bitfinex Team

Thanks for the reply Giancarlo. I know that you are a very straight talker, but please be aware that the more BFX grows, the more you need to watch the phrasing of your communications, especially an official announcement to your customers. Based on previous experience, and looking at what Gox is going through now, i would suggest you take some proactive steps to save BFX costly future legal battles:

1- As per regulation in most developed countries, customers have to have prior notice of any changes to the terms and conditions, as the T&C is considered a legal binding contract, and no contract can be changed unilaterally. The amount of time for the notice can depend, but i suggest a minimum of 2 weeks.

2- Also, please have us "Accept" again the new T&C when we log-in next time on the platform after the T&C changes, as that is the only legal proof that we have been notified and accepted the new conditions.

On the discussion of the insurance, i understand that BFX has more or less $1.5 million in reserves, and this is what you meant by "insurance", the fact that you will reimburse any losses up to that level. Please be aware that using words like "insurance" when you actually mean a very different thing (partial reimbursement of TOTAL losses for open SWAPS, up to $whatever number) can be seen as deceitful and again, will be a legal issue. As we've seen recently, you guys took steps to be legally compliant (e.g. renaming Loans to Swaps), so i trust you will give the same serious thought to my advice above. And just to set things straight for everyone, please make it clear here that you are not insuring the swaps, but simply doing a best-effort attempt at minimizing the losses in case of a crash.

On the discussion of "an extra 5% cut" on Swaps, you have increased the fee, percentage wise by 50% (FIFTY PERCENT). That a major increase, and again, it is not justified by your argument in the communication. So let's please not try to downplay the scale of it by using absolutes.

Again, i'm perfectly fine with the fact that this is not a democracy, that you are talking to us here only because you want to know our thoughts and not necessarily to consult us, and that basically you guys can do whatever you want. But, in case those $16+ millions on BFX are not concentrated in the hands of a few people (which you can convince with a telephone to absorb the increased fees), please try to manage in a better way such major changes from a PR/communications point of view. As a customer i feel deeply upset, and I'm sure you would not be happy if one of your service providers would increase their fees by 50% over night, using an argument that is not provable.