Federations are one trusting one person
That's the point
It's all a larp, that's the scam
Discussion
It's not just one person to sign to move those funds out of the Federation's wallet or to issue new ecash. How is that a larp?
It's one server providing the API, it has several vectors for unilateral rug
These products aren't raising hundreds of millions from large custodians to benefit you, they're scams like every other shitcoin
The API can't sign for guardians, it's just going to relay for the guardian to sign on anything leaving.
They're raising money because this is a valuable tool to have. I think there's people definitely using it the wrong way, with the wrong assumptions, but applying the term scammer is certainly not the term that should be used for the overall idea IMHO.
It's valuable to the operator in scamming the user by making them think the trust is distributed. That is it's usecase.
If you want to claim its useful for scamming the regulator, that's fair, but don't pretend its any better than single party custody to users.