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Originally Posted by stocktrader23
So, like I said. Epassporte could be 100% dirty but it's fucking retarded and not how any middle man dealing with money should operate. The OP acts like the only way to pay employees is by stealing the cash and running a ponzi. This is 100% false.
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I think you are missing some of my points. I am not claiming that ePassporte was set up as a Ponzi scheme, that is an entirely different thing all together.
My theory is based on the premise of regulated financial institutions such as banks or Paypal.
Let's take Paypal as an example. Paypal is covered by FDIC Pass Through insurance, which is different from that provided to banks. Specifically:
From FDIC public disclosures available from Paypal:
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Pass-through deposit coverage is contingent upon PayPal maintaining accurate records and on determinations of the FDIC as receiver at the time of a future receivership of any bank at which we place your funds. FDIC pass-through deposit insurance protects you only against the failure of the bank at which PayPal places your funds, and does NOT protect you against PayPal's insolvency.
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Paypal is a "middle man" as you put it, it stores fractional reserves of account holder US Dollar balances in various banks, at the moment these include:
(Source Paypal web site - disclosure statements)
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Bank of America, N.A., Citibank, N.A., HSBC Bank USA, N.A., RBS Citizens Bank, N.A. and Wells Fargo Bank, N.A.
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Given a full run on Paypal there would be a crisis and Paypal would have to call in any investments have been made with depositors funds. However as Paypal only hold pass through insurance there is no implicit guarantee that funds could be paid to all account holders. This would depend entirely on Paypal maintaining more in cash and security than was held in accounts (given that there would be a financial cost of managing such an event and reclaiming invested funds).
ePassporte was NOT subject to insurance of account holders funds nor the structural regulation that would be required to hold such insurance. So there is no point in anyone claiming that ePassporte could be held to a higher standard than a regulated financial institution as history shows that where corporations are not bound by regulation then risk taking behavior is more likely.