Does that bother you, in any way? Asking a question isn't a crime. I feel that such a service should be useful to the Bitcoin community which still respects their privacy and anonymity.
MY idea is to try and develop a system which lives up to the principle idea of being your own bank (Not your keys, not your coins.). While you earn an interest.
It doesn't bother me, it bothers logic.
How do you lend somebody money while keeping them in your own pocket?
The guy goes to a store buys something on your IOU promise and in the meantime, your somehow lose your keys or you spend all your coins in a casino, or something else. How much is then your promise to pay worth?
The idea behind bitcoin is indeed to be your own bank, but there is nothing about issuing loans while not giving out those loans, remember that for the client of this bank
the same principle must exist and be true when he gets the loan,
his coins his keys, which is impossible!
Again, sticking to bitcoin and no other shitcoin or sidechain and respecting those three requirements is impossible, you could somehow avoid this with collateral in another coin which is against the whole idea of using only bitcoin, or with you creating a legal agreement with the said person and guaranteeing the viability of those funds with something else, but that would definitely reduce the number of clients and void anonymity.
Well, if you must know, I made a series of tests and the said casino was able to fail them all. From their security, support, provability logic, etc.
Freebitcoin has an active topic here with plenty of support, I'm pretty sure they would be eager to hear about what security flaws you've found.