Magnr Review – Is Magnr Legitimate or an Investment Scam?
I was recently asked to make a review on Magnr, the world’s first BitCoin Savings/ Investment account. At the first glance, it does look like another HYIP to me. I had the same question as yours too – is Magnr.com legitimate or an investment scam? Read my Magnr review to find out.
What is the Magnr?
Website address: magnr.com
Price: $0 (There is no minimum amount to deposited. However, your account balance must be a minimum of 0.1 BTC to earn interest.)
Overall Rank: 85 out of 100
Magnr (Great in the latin word) is a multinational company that engages in bitcoin trading, savings and investment for digital currencies. It is the second product from BTC.sx, a popular Bitcoin trading platform established in 2013 that has brokered over 60,000 trades.
At the time of writing, there is more than $800 million worth of BitCoin sitting idle. This is where Magnr comes into the picture. Magnr is used for the purposes of storing bitcoin you wish to hold for longer periods of time. By depositing your bitcoin, you will be rewarded with interest payments on how much and how long you save them. Magnr account works just like your regular savings account on the bank, except this is a sort of bitcoin bank, where you only have deposits and withdraw option.
Investors deposit bitcoin and earn interest monthly. Interest is paid on the first of the month and bitcoins can be withdrawn at any time.
The BTC.sx trading platform is rebranded as Magnr. This is to highlight how the two products work together. The trading platform generates interest from Magnr’s traders paying fees on leveraged positions. In other words, traders borrow bitcoin for very short term trades and pay interest for doing so.
However, Magnr doesn’t engage in public lending activity like any other traditional banking systems, nor do they trade Bitfinex swaps. Their business model requires them to have cash collateral on exchanges to allow trading to route through their platform. This is how the interest is generated.
Magnr uses BitGo’s multi-signature security wallets and they keep 100% reserves to keep your savings secure. You can also transfer money from your savings account anytime, should you need it for some reason. There are no penalties for making savings withdrawals before the end of the month. Simply earn interest on your funded balance.
Should You Trust Magnr?
I trust the Magnr. Why? The Magnr team.
Magnr team and all of its members have public profiles that you can look up on LinkedIn, Facebook, and Twitter. All the team members previously had established careers before coming together in Magnr.
Something that is worth mentioning is the CEO, Colin Kwan. He is a former Deutsche Bank VP and he is elected as the director of the board of UK Digital Currency Association (UKDCA) who is responsible for lobbying for pro digital currency stance from the UK government.
Magnr was founded by Joe Lee back in 2011 when he saw Crypto as an emerging new field within the finance industry. He is formerly of Barclays Bank and Macquarie Group. His experience in the banking industry made him realized how inefficient and untrustworthy the industry was. At the same time, he saw a chance for a more legitimate finance industry to exist for Bitcoin.
The founding team includes veterans with experience from Barclays, eBay and Jaguar Land Rover they are Joseph Lee, James Turner, Sergio Rodriguez and Kwok Man.
How Does Magnr Work?
The Bitcoin deposited at Magnr is also used to fund leveraged trades at Magnr Trading. The traders pay an interest rate to execute leveraged trades, which is then passed back to Magnr savers.
After a fixed introductory rate, a variable interest rate will be used. This rate will vary according to trading activity on Magnr Trading.
The current introductory Interest Rate is a fixed rate of 2.35% fixed rate of interest until July 2016. After the introductory period, interest will be earned at a variable rate. Interest accrued compounds on a monthly basis.
However, some people complain that they can only earn interest up to 100 bitcoins. That simply means you can deposit more than 100 bitcoins for safe storage, however, interest will only be paid on 100 bitcoins.
Buying and selling
Users of Magnr Trading can open long and short positions using the proprietary trading platform. A corresponding buy and sell order is then placed out to market at a matching exchange with or without leverage.
All positions opened will have a corresponding position placed out to market meaning that any profits gained or losses generated from market movements will be passed on directly to the client.
Trading at Magnr is done on a pre-paid basis. In order to open a position, a deposit is taken which acts as collateral. This collateral will act as an equivalent of a margin call. This is the price at which a position will be automatically liquidated if losses accrue to the deposited amount.
The margin call is shown as a stop price when the position is opened. A larger deposit will enable a bigger stop distance to be chosen. This can result in larger losses if the price moves against the desired direction.
What other features?
There are no fees for opening an account, subscription or saving with Magnr. Magnr doesn’t charge you for making Deposit and Withdrawal transactions. On Magnr Trading traders borrow bitcoin for short term positions.
The traders pay a daily interest rate to keep positions open. As a result, Magnr passes on interest earned on these positions to the savers, who deposit with Magnr Saving.
Their customer service is extremely responsive. I am amazed by their transparency as I got all my questions answered in less than 24 hours.
What are the weaknesses?
There is one area of concern and it is a big one – Magnr isn’t insured. Every company in the bitcoin space is under attack by hackers, thieves, and fraudsters. Some companies like Mt. Gox and Cryptsy have been wiped out by hackers.
Other companies like BitPay and Coinbase have survived thefts. They do this through a combination of secure engineering, keeping customers unaffected by losses, and being insured.
This means if you want to earn interest, then you have to take on the added risks. However, I have confidence in Magnr that they