Looking inside BitEnsure: Bitcoin savings account or Ponzi scheme?

BitEnsure claims to be a "bitcoin savings account". But is it any different from Trendon Shavers now-exposed Ponzi scheme?

AccessTimeIconAug 5, 2013 at 10:12 a.m. UTC
Updated Dec 10, 2022 at 8:04 p.m. UTC

Disclaimer: CoinDesk does not in any way endorse BitEnsure and is not qualified to offer financial advice. Any actions readers choose to take are at their own risk.

Update August 16, 2013:

BitEnsure has now announced that it is closing due to bad press. Its website now has the following message: "Unfortunately, due to the timing of launching Bitensure and current news events the reception to Bitensure has been overwhelmingly negative. We do not see the potential that once existed in the idea of a Bitcoin Savings Account at this time. We are discontinuing the site."

BitEnsure also confirmed that it would be returning all deposits in full.

We spoke to a BitEnsure customer who confirmed that (prior to the closure) BitEnsure had been active on its support forum and had been prompt in acknowledging receipt of deposits. The same customer also confirmed to us that they received their bitcoins back from BitEnsure. This person also confirmed that another customer he/she knew had also received a full refund.


Recently launched BitEnsure claims to be a new "bitcoin savings account". In the wake of the SEC's recent charging of Trendon Shavers for operating a bitcoin Ponzi scheme, it's a contentious claim. CoinDesk interviewed the founder to find out more.

BitEnsure promises guaranteed returns on set-term deposits of one bitcoin or more. The new company is backed by a team of traders and programmers who have been developing the Metaneural trading system for a number of years. We spoke to Metaneural's John Jones to find out how this bitcoin savings account works.

The people behind BitEnsure are primarily traders. BitEnsure is their attempt at branching out into the bitcoin world by offering a traditional savings account. The thought that may occur to many bitcoin enthusiasts is that a savings account is so far the preserve of fiat banks which operate on a fractional reserve system.

For those who don't know, fractional reserve banking is the process by where fiat banks do not hold sufficient funds to cover all of the deposits made by its customers. This is why the nightmare scenario for any bank is the classic "run on the banks" where nearly all the customers decide (usually in a state of panic) to withdraw their funds at once.

Jones stated that the company will not be using such a system, and customers effectively have a certificate of deposit and that the company has a cache of bitcoin to back up customer deposits. Jones also stated that in the event that the company has a catastrophic drain on its main bitcoin account, it has a backup of all customer deposits too.

BitEnsure also serves as a bitcoin mixing service. Jones told us the company never uses the same address twice, so it's almost impossible to track bitcoin through its system, given that bitcoins leave BitEnsure to fund the group's trading activities elsewhere. This provides an interesting option considering that BitEnsure charges no fees, compared to the Blockchain.info's mixing service that takes 0.5%.

To elaborate on the trading activities of the BitEnsure team, their other company is called Metaneural, which is (so I'm told) a neural network automated trading system. While other exchanges allow users to automate trades by placing buy and sell orders on an "if this then that" basis, Jones explained to me that Metaneural's system searches for patterns in the market and makes decisions on its own as to when it should enter and exit a market and with what volume. This software is sold to third-party clients. Metaneural's forex performance can be seen over on MyFXBook.com.

"We have been using it for a few years now, but only made it public earlier this year. We like to test everything, obviously, just to make sure that it actually works and gives the profits that we profess. It's been in the works for a while and we're very proud of it."

He went on to tell us: "We're doing a little over 30% a year, which in the forex world doesn't sound like much, but when you get into the 140% or 1000% that a lot of other people are promising, it's probably not real. If you're being very safe and you're not over leveraging yourself, 30% is a very good profit margin for a year."


As for what customers can expect, there is a minimum investment of 1 BTC. I asked Jones if this minimum would change, and he said that it would only change if bitcoin became super inflated, so as to not lock people out of the service.

The BitEnsure website shows that there are several saving plans, each with their own minimum fixed term. I asked Jones what would happen if a customer needed to urgently withdraw their funds. He answered that there is an emergency withdrawal system, where funds will be released during an active term, but will be subject to a penalty charge.

Understandably, there has been a somewhat negative reception to BitEnsure on the bitcoin forums, with several users suggesting that it is merely another scam.

Jones was quick to emphasise his company's transparency in response: "I'd say it's really a trust sort of business that we're in. If we cheat our customers we can't continue to do business. I know the current news about the Ponzi scheme, which was called Bitcoin Savings and Trust, has made a lot of people very sceptical, which is totally understandable. But the difference between what he was doing and what we're doing is that we're a lot more transparent. We're telling you how much profit you're going to make, where it's coming from and we are an established business with a reputation. I'd say it comes down to giving it a try and trusting that we wouldn't put all this effort into something that we want to fail."

As for customers "giving it a try", I asked Jones how many customers had signed up so far in the week since BitEnsure's launch and he replied "over a hundred".

Update August 6, 2013:

We should point out that when first interviewed John Jones, he was going by the name John Titor, which is what he is listed under on the MetaNeural website. Furthermore, it came to light after the interview that the profile photo above his name isn't actually his image, but an image of JP Rosenbaumhttp://www.wetpaint.com/the-bachelorette/articles/how-does-jp-rosenbaum-stay-so-businessman-hot-all-the-time. Jones explained to us that the use of a pseudonym was to protect his privacy, which may or may not explain the use of a fake photograph too. Either way, the obfuscation of identity in the people behind a money handling company will affect the level of consumer trust.

We would like to hear from customers of BitEnsure and to know what sort of service they experienced.


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