Can Prosper Pay Interest? | P2P Lending, Peer to Peer Lending, People to People Lending

In a past post somewhere, John Witchel said, lenders cash was kept in separate accounts, known as FBO accounts, as this was safer,that if Prosper folded, the money could easily easily returned to us this way and that Fed Regs prevented paying interest on this type of account. Now at Prosper Days, he says “Maybe”, So I guess there’s trade offs. They are working on some type of workaround.
I don’t care so much since I only have a small amount of cash, I can see people who have a lot of cash, wanting it,but as John also pointed out,
we have instant transfers on over $500 now. So you can keep your money in an outside interest bearing account and transfer it over when you want it.

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