Quote:
Originally Posted by stocktrader23
Obviously if they spent more than their profit they can't payout. However, there is no reason they would need to do this and it is in fact rather fucking retarded to do so.
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Of course they would have, no unregulated financial services business is going to sit on 100% of the money it holds for account holders when regulated and insured financial services business don't.
ePassporte would have had funding for recurrent liability plus a buffer for the fractional reserve margins dictated by their own modeling of the transactional nature of the business.
Additional funds would have been used for investments (some will pay, some will fail), risk loss adjustments if fraud levels spiked, recurrent funding of additional liabilities to lien holders and suppliers etc.
Even Paypal would not survive a run on funds and it's insured and regulated in many countries - ePassporte was not subject to any financial services regulation of any note, it could do what it wanted basically and probably did.