Ask HN: Is Seashell legit? Startup offering 10% interest
The product: "Earn up to 10% interest on your cash. Compliance focused. No hidden fees. Get started in minutes."
The FAQ page explains how they earn such high yields: "We place your money into a diversified strategy, partially investing into safe haven assets like gold and partially investing into dollar-pegged digital assets that attract borrowers who are willing to pay higher interest fees. As a result, your money is generating reliably up to 10% interest, leaving you with more cash in your pocket."
This sounds like an investment product that is substantially downplaying the risks (placing money in non-digital assets like cyrpto) - a material misrepresentation of an interest-bearing account.
And does "compliance focused" mean they're actually compliant? Or are they following the Robinhood model of building up a treasure chest before regulators notice, in order to afford the legal costs and changes necessary to clean up their act (i.e. cost of doing business).
It doesn't pass my smell test, but I'd like to hear your thoughts.
11 comments
[ 0.21 ms ] story [ 46.8 ms ] thread“As detailed in your account agreements, Seashell is not FDIC insured and like any investment product, there is a risk that your investment may lose value.”
https://www.seashell.com/frequently-asked-questions
Possibilities include a Ponzi scheme or the like (possibly on the VC funding side), brazenly lying or carefully almost-lying to customers, delusional leadership, investments in something illegal or ridiculously high risk. Most likely, they care for their stock and their exits rather than their customers.
It's a crypto yield account that downplays the fact that it's crypto.
Do with that knowledge what you want.
“Disclaimer: Custody and settlement services are offered through Prime Trust, a Nevada trust bank. Seashell Financial Inc. ("Seashell"), a Delaware corporation, does not provide legal, tax, or investment advice. Holdings of digital assets are speculative and involve a substantial degree of risk, including the risk of complete loss. There can be no assurance that any cryptocurrency, token, coin, or other digital asset will be viable, liquid, or solvent. No Seashell communication is intended to imply that any digital asset services are low-risk or risk-free. Seashell works hard to provide accurate information on this website, but cannot guarantee all content is correct, complete, or updated. Digital assets held in custody are not guaranteed by Seashell and are not FDIC-insured.”
Also, chances are you’ll have to sign something similar before signing up. I would think they probably get away with that.
From the little I can understand this is offering something like a "backbone" to new fintech companies via some API, definitely with some crypto-coin-related stuff, but also allowing "normal" money accounts:
https://www.primetrust.com/
The "about" page:
>What we do
>The one-stop shop for fintech innovation
>Prime Trust’s APIs and widgets power the world’s leading crypto exchanges, NFT creators, digital wallets, Alternative Trading Systems, RIA platforms, broker dealers, crowdfunding platforms, and neobanks.
though it is not clear (to me) how the actual custody works, from their help/FAQs:
https://support.primetrust.com/hc/en-us/articles/44102221908...
>Does Prime Trust offer $130m in FDIC insurance total or $250k in FDIC insurance per account?
>Prime Trust is not an FDIC-insured entity but does work with FDIC-insured banks only. To learn more about FDIC insurance, go to https://www.fdic.gov/resources/deposit-insurance/
Here's the important part.
It's innovative in they've found a way of giving you the returns of a moderately risky stock market investment whilst offering you the risk profile of playing in traffic.