Hopefully Binance still has all the money customers deposited and didn't lose it or trade it for magic beans like FTX did.
If a lot of customers take out their money and Binance goes out of business, that's fine. I mean, it sucks for Binance, but they are kinda shady and the world might be better off without them. If customers find out their deposits don't exist anymore, that's definitely not fine.
They’re a shady crypto exchange (is there any other kind?) that’s been banned in a tonne of countries around the world for flaunting financial regulations. If there’s a major run on Binance, I’d be shocked if depositors get their deposits back.
> regular Proof of Reserves audits make it easy for clients to verify the balances they hold are backed by real assets, all with just a few easy clicks in their account.
Question that I'm sure has been asked a million times, but I've not really seen an answer that satisfies me:
What's the fundamental value of Crypto?
It's utility? If so, I'm sure there's a calculation you could make that compares the number of "useful" legal transactions (economic activity) vs. the market cap. I'm assuming the numbers are probably ridiculous, however; the equivalent of 1,000s of dollars of "value" per real transaction.
My assumption is that the bulk of Crypto's actual value is its ability to hide flows of money from regulators (tax avoidance, drug money, silk road transactions, etc). KYC rules probably have helped in this regard, although I'd be interested in someone in the know having an opinion.
Do we have estimates for what % of crypto transactions are not provably legit?
Crypto is gambling. Equally barely legal, equally based on nothing but bullshit and greed and hopes for the big win. Equally only 'the bank' wins at the end.
"Hopefully Binance still has all the money customers deposited and didn't lose it or trade it for magic beans like FTX did."
Of course they don't have all the money ! If they had, they wouldn't be targeted by virtually all financial regulators on the planet and they would publish a real audit.
I just withdrew 95% of my assets from Binance, and they came really fast. Some within seconds. I know "not your keys, not your coins". I just had like 10% of my coins on there because I like to gamble, I mean trade.
and yet, others frequently attest to trying to get their money or cryptos out and being rapped in a loop of Binance repeatedly demanding more KYC and they never get their funds out
> I mean, it sucks for Binance, but they are kinda shady and the world might be better off without them.
For countries like Venezuela and Argentina, Binance has a messianic reputation in the sense that P2P currency exchanges are what keeps the economy functioning for the lower-rank citizens. Top-tier citizens just use Zelle, but as you might not know, not everyone can afford/is allowed to go the U.S. and open a bank account (e.g. I, for instance, was denied a tourist visa last time, though I am more than able to afford vacations there).
If Binance were to fail, other P2P exchanges (like Reserve, Airtm and the now-dead Localbitcoins) wouldn't be able to take up with the current volume of P2P transactions of both countries.
I'm not saying these countries would grind to a halt as "direct" P2P currency exchange would still exist, but people that rely on Binance P2P for their day-to-day operations would downgrade their lifestyle, big time.
Those benefiting from traditional banking, ie the 1% of the world in the US and EU, are largely completely naive to the tragic despair of the other 99%, either completely unbanked, oppressed via predatory inflation policy and capital controls or just simply rigged against them.
Crypto was created from the ruins of bailouts where the poor masses where put on the hook for the crisis created by central banks ad wall st. That hasnt changed. Innovation and critical mass usage will arise from the bottom up, Nigeria, Venezuela, Argentina, El Salvador. Nations like the US and EU will be the last to embrace it, at their peril, when they have no real other choice to not be left behind.
If the deposits don’t exist it’s still fine. A lot of people have lost deposits from crypto collapses and they’ve been fine, because currently no one uses crypto for actual working day to day capital (paying bills), it’s all speculative holdings that they could afford to lose.
It's so interesting to see the tone differences when SVB was on the edge vs Binance
I my speaking in general here because I have no idea what you're opinion may have been on the SVB depositor bailout. The large majority of commentary I saw over the weekend after SVB failed was how it would wreck average customers and how the government had to step in to make them while. I'm not sure if it's because this is Binance or crypto in general but it seems like people either don't care or want to see it fail regardless of their depositors' investments
Banking is a requirement for businesses to function. Depositors have no choice but to put their money in some bank. It's debatable whether depositors ought to take a haircut or be made whole if their bank suddenly fails. The greater the perceived risk of deposits being held at a bank being worth less than 100 cents on the dollar, the more flighty deposits will be. Even if depositors got back 90% of their money, the concern with SVB was probably more about how long companies' cash would be inaccessible. Perhaps some of the hubbub the weekend SVB failed could have been avoided if the FDIC was able to have some sort of policy to release immediately not only the insured amount, but perhaps also some "safe" percentage that is expected with some confidence to be recovered, like 50%.
Meanwhile, over in crypto land, choosing to gamble on the volatile price swings of speculative digital assets (aka "magic beans") in a market driven in no small part by people evading laws—whether it's illicit purchases, money laundering, ignoring securities regulations, wash trades, pump-and-dump schemes, etc.—is a completely different matter.
It is still, in a certain light, sad that someone would become unemployed because their crypto startup employer's capital was lost in the collapse of a fraudulent exchange. Or someone lost their life savings. But really, what did you expect would happen?
While one could be less sympathetic of small business employees losing their income due to a bank failure or more sympathetic of a crypto user losing their life savings, they're drastically different circumstances. I don't see how one could expect people to either take a blanket "save all depositors and gamblers" nor "all depositors or gamblers should lose everything."
Keep in mind also that practically no one has argued in favor of shareholders in SVB getting anything but a 100% loss on their equity. If you view crypto people as "investors" then there should also be the expectation that one of risks they are taking by "investing" in magic beans is that whether or not they turn out to be magical, the place that stored them may unexpectedly blink out of existence.
If Binance (hypothetically) does have 100% of the customer reserves, what difference does it make if they all withdraw? Doesn’t Binance make money off of trades / transactions rather than using the customer funds like FTX?
This is literally the eulogy for SVB. Can we all just agree that 1) it’s ok for banks to fail and 2) it’s not ok for people who put their money in banks to lose their money.
So what is 3? Why don’t we just have nationalized banking? I mean, seriously?
If you decide to give someone else money, you have a responsibility to think about whether you are likely to get it back.
These bankers are dangerous idiots who are destroying millions to billions of value. It is a terrible idea to start handing out free passes to the people who enable them - ie, depositors. It is easy to imagine a bank that doesn't have bank runs - 100% reserves. If a person is going to put their money in banks well known to be a house of cards then they have some responsibility to pay for when the cards collapse.
We cannot sustain a system were people just donate money to Joseph Gentile again, and again, and again. They have to stop doing that. And losing money is the only way to make that happen, anything else will let too many cockroaches through the screen. Instead, the proof in the pudding right now is that he is one of the safest people in the world to give money to!
> 2) it’s not ok for people who put their money in banks to lose their money.
The only way to fix this is to ban fractional reserve banking (FTR: we have now something even worse than fractional reserve banking because now the deposit guarantee required is 0%, which means it's not even a fraction anymore). Good luck with that.
How can they? SVB has made it clear that it is very difficult to maintain value. If Binance has invested all their money in securities, it's not unlikely that their investments have gone done down with the rising of the interest rates.
If they keep all money in regular banking accounts, they may still have it. But they are exposed to the risk that their bank or their banks become insolvent.
I have doubts about their finances but that comparison makes no sense. SVB is a bank, Binance is a cryptocurrency exchange that doesn't have the fiat custody issue to that extend because they're mainly not dealing in fiat. It's more of a question of how companies like Tether have invested their dollars and the answer is nobody really knows.
Binance came out of nowhere with massive fake volume, as a China-based exchange pretending to be based in Hong Kong. They've proceeded to thrive by having a reputation for giving accounts to anyone, globally (which, TBH, is not a bad thing as they operate in countries where it's better than trying to save in the local currency). And their home country is "somewhere you are not".
There is no basis for believing that they have maintained all the funds: why would they?
There was a reason Bernie Madoff was one of the most respected men in finance. He always delivered high returns and always met withdrawal requests promptly. Until one day he didn't.
yes, they're how it became obvious to me that "organized crime" has become part of 'legitimate government', or rather of "the state".
the state being this concept which encapsulates all institutions (government, academia, religion) and corporations (the military, the 'criminals' the banks, the media, etc) ruling over all of us; organizing us into a 'civilization'.
so the idea is that the legit government is really just the public known face of the state-apparatus, another part of this apparatus being organized crime, yakuzas in japan... chinese triads, italian mafia... latin american drug cartels, etc
If binance users themselves hold 30% USDT on average it doesn't matter for Binance whether it's pegged or not (I mean, obviously it will still matter somewhat), since any de-peg event will also devalue any USDT user-balances
Tether's attestation reports are a form of proof that show they indeed are 1-1 backed by the value of outstanding USDt tokens at par. [1]. Paxos publishes the same for BUSD on ETH. [2] Paxos has redeemed $10B of BUSD (> 50%) in an orderly fashion over the past couple months as they wind their product down.
It is not. coinglass has the inflows/outflows of the top exchanges and they had worse days. Also their BNB seems to be largely unaffected though it did drop a bit... am wondering if the users are aware of these news, they don't care, or are confident Binance will come through.
>am wondering if the users are aware of these news, they don't care, or are confident Binance will come through.
Or this is evidence that the 'true' market is thin/insignificant and the price is mostly controlled by inauthentic volume that is coming from (and going to) Binance itself.
Yet $42B in deposits withdrawn a single day out of $175BN isn't significant for SVB? What I am seeing here is $2B in outflows is like a leaking firehose for Binance, when SVB experienced a tsunami of outflows. It would have to take more than that to make Binance go under. Fast.
Surely you remember what happened weeks ago when tech bros here were screaming when their favourite VC bank and their pyramid scheme just collapsed?
Either way we all know that a crypto exchange will collapse this year. Who knows. [0]
I just withdrew all my funds from Binance and they arrived in 5 minutes. Zero issues so far. I doubt they don't have enough money to cover withdrawals.
Far OTM puts on BNB would be a good play to bet on binance failure or hedge, sorta like a credit default swap. Of course, not on binance. You could probably lend assets on binance to collect $ while hedging with BNB puts on some other exchange.
Hopefully binance didn't straight up steal customer funds like FTX. It's profitable enough to charge hefty fees (compared to tradfi) and use customer info to feed your quant algorithms or act as a market maker.
On the one hand, I've been anticipating regulatory action for quite a while now. Crypto enables ransomware and other crime, although it does make it easier to track criminals. So it perhaps helps small time crooks and harms sophisticated ones. But if you're sophisticated enough you'll just switch back to cash. So I'm not sure why it's still permitted, aside from the legal difficulty of suddenly banning something you've already allowed for so long.
Then again, over the last several years long term treasuries have been an even more harmful pump n dump scheme (orchestrated by the Fed) due to their scale.
Readit News
If a lot of customers take out their money and Binance goes out of business, that's fine. I mean, it sucks for Binance, but they are kinda shady and the world might be better off without them. If customers find out their deposits don't exist anymore, that's definitely not fine.
Yes. Kraken.
> regular Proof of Reserves audits make it easy for clients to verify the balances they hold are backed by real assets, all with just a few easy clicks in their account.
https://www.kraken.com/proof-of-reserves
> A decent rule of thumb is that all cryptocurrency exchanges are doing crimes, and if you’re lucky your exchange is doing only process crimes.
https://www.bloomberg.com/opinion/articles/2023-03-27/the-cf...
What's the fundamental value of Crypto?
It's utility? If so, I'm sure there's a calculation you could make that compares the number of "useful" legal transactions (economic activity) vs. the market cap. I'm assuming the numbers are probably ridiculous, however; the equivalent of 1,000s of dollars of "value" per real transaction.
My assumption is that the bulk of Crypto's actual value is its ability to hide flows of money from regulators (tax avoidance, drug money, silk road transactions, etc). KYC rules probably have helped in this regard, although I'd be interested in someone in the know having an opinion.
Do we have estimates for what % of crypto transactions are not provably legit?
Yes. Bitstamp.
No guarantee of future performance, of course...
Of course they don't have all the money ! If they had, they wouldn't be targeted by virtually all financial regulators on the planet and they would publish a real audit.
For countries like Venezuela and Argentina, Binance has a messianic reputation in the sense that P2P currency exchanges are what keeps the economy functioning for the lower-rank citizens. Top-tier citizens just use Zelle, but as you might not know, not everyone can afford/is allowed to go the U.S. and open a bank account (e.g. I, for instance, was denied a tourist visa last time, though I am more than able to afford vacations there).
If Binance were to fail, other P2P exchanges (like Reserve, Airtm and the now-dead Localbitcoins) wouldn't be able to take up with the current volume of P2P transactions of both countries.
I'm not saying these countries would grind to a halt as "direct" P2P currency exchange would still exist, but people that rely on Binance P2P for their day-to-day operations would downgrade their lifestyle, big time.
Crypto was created from the ruins of bailouts where the poor masses where put on the hook for the crisis created by central banks ad wall st. That hasnt changed. Innovation and critical mass usage will arise from the bottom up, Nigeria, Venezuela, Argentina, El Salvador. Nations like the US and EU will be the last to embrace it, at their peril, when they have no real other choice to not be left behind.
I would say that at least any Americans who lose money there "deserve" what's coming to them since binance was banned in the US.
I my speaking in general here because I have no idea what you're opinion may have been on the SVB depositor bailout. The large majority of commentary I saw over the weekend after SVB failed was how it would wreck average customers and how the government had to step in to make them while. I'm not sure if it's because this is Binance or crypto in general but it seems like people either don't care or want to see it fail regardless of their depositors' investments
Meanwhile, over in crypto land, choosing to gamble on the volatile price swings of speculative digital assets (aka "magic beans") in a market driven in no small part by people evading laws—whether it's illicit purchases, money laundering, ignoring securities regulations, wash trades, pump-and-dump schemes, etc.—is a completely different matter.
It is still, in a certain light, sad that someone would become unemployed because their crypto startup employer's capital was lost in the collapse of a fraudulent exchange. Or someone lost their life savings. But really, what did you expect would happen?
While one could be less sympathetic of small business employees losing their income due to a bank failure or more sympathetic of a crypto user losing their life savings, they're drastically different circumstances. I don't see how one could expect people to either take a blanket "save all depositors and gamblers" nor "all depositors or gamblers should lose everything."
Keep in mind also that practically no one has argued in favor of shareholders in SVB getting anything but a 100% loss on their equity. If you view crypto people as "investors" then there should also be the expectation that one of risks they are taking by "investing" in magic beans is that whether or not they turn out to be magical, the place that stored them may unexpectedly blink out of existence.
So what is 3? Why don’t we just have nationalized banking? I mean, seriously?
These bankers are dangerous idiots who are destroying millions to billions of value. It is a terrible idea to start handing out free passes to the people who enable them - ie, depositors. It is easy to imagine a bank that doesn't have bank runs - 100% reserves. If a person is going to put their money in banks well known to be a house of cards then they have some responsibility to pay for when the cards collapse.
We cannot sustain a system were people just donate money to Joseph Gentile again, and again, and again. They have to stop doing that. And losing money is the only way to make that happen, anything else will let too many cockroaches through the screen. Instead, the proof in the pudding right now is that he is one of the safest people in the world to give money to!
The only way to fix this is to ban fractional reserve banking (FTR: we have now something even worse than fractional reserve banking because now the deposit guarantee required is 0%, which means it's not even a fraction anymore). Good luck with that.
Dead Comment
Is anyone taking bets?
How can they? SVB has made it clear that it is very difficult to maintain value. If Binance has invested all their money in securities, it's not unlikely that their investments have gone done down with the rising of the interest rates.
If they keep all money in regular banking accounts, they may still have it. But they are exposed to the risk that their bank or their banks become insolvent.
I'd be very interested in reading actual proof of them being shady. Please do share.
Binance came out of nowhere with massive fake volume, as a China-based exchange pretending to be based in Hong Kong. They've proceeded to thrive by having a reputation for giving accounts to anyone, globally (which, TBH, is not a bad thing as they operate in countries where it's better than trying to save in the local currency). And their home country is "somewhere you are not".
There is no basis for believing that they have maintained all the funds: why would they?
https://web3isgoinggreat.com/?id=cftc-sues-binance-and-ceo-c...
They didn’t have an HQ, come on, criminal organisations don’t have an HQ. Companies have them.
Shady connections to China, BSC was a mega scam, just ridiculous.
http://www.japansubculture.com/resources/yakuza-organisation...
the state being this concept which encapsulates all institutions (government, academia, religion) and corporations (the military, the 'criminals' the banks, the media, etc) ruling over all of us; organizing us into a 'civilization'.
so the idea is that the legit government is really just the public known face of the state-apparatus, another part of this apparatus being organized crime, yakuzas in japan... chinese triads, italian mafia... latin american drug cartels, etc
From the Coinbase S-1
https://www.sec.gov/Archives/edgar/data/1679788/000162828021...
They literally don't put a headquarter to claim to avoid all regulations
And GitLab... and few other companies that are popular on HN.
Yes, they do
https://www.nerdwallet.com/best/investing/crypto-exchanges-p...
Coinbase
Robinhood
Webull
TradeStation
etoro
SoFi
Binance.US
Gemini
Kraken
Crypto.com
Firstrade
I haven't heard of half of these...
> Overall, Binance holds $63.2 billion in the exchange’s publicly disclosed wallets, Nansen data shows.
So, yes I think $2B is significant.
- 30% is hold in USDT (for which there is 0 proof that it is 1-1 backed)
- 10% is hold in its own stablecoin BUSD (Not always 1-1 backed source)
- 5% is in its own native token BNB
- 15% is in small cap (sh
tcoins)source*: https://protos.com/binances-stablecoin-busd-hasnt-always-bee...
As in, Binance hasn't failed if USDT goes to zero but you're still able to withdraw that Tether you have in Binance.
They've even admitted that it's not 1-1 backed by fiat themselves, so pretty safe assumption to make.
[1] https://tether.to/en/transparency/#reports
[2] https://paxos.com/busd-transparency/
Was it caused by the Signature FDIC announcement? https://news.ycombinator.com/item?id=35350032
Binance Sued by CFTC Over Evading U.S. Rules
Or this is evidence that the 'true' market is thin/insignificant and the price is mostly controlled by inauthentic volume that is coming from (and going to) Binance itself.
Surely you remember what happened weeks ago when tech bros here were screaming when their favourite VC bank and their pyramid scheme just collapsed?
Either way we all know that a crypto exchange will collapse this year. Who knows. [0]
[0] https://news.ycombinator.com/item?id=34201475
https://old.reddit.com/r/BinanceUS/new/
Deleted Comment
New "regional hub" announced this week. https://gbc.ge/en/news/busines-snews/binance-announces-openi...
Meeting the totally not sketchy Prime Minister in November: https://1tv.ge/lang/en/news/1685013/
https://ge.usembassy.gov/u-s-georgia-joint-statement-on-extr...
But I'm sure Zhao has made a few adjustments to his exit strategy after watching SBF and Do Kwon do the perp walk.
Deleted Comment
On the one hand, I've been anticipating regulatory action for quite a while now. Crypto enables ransomware and other crime, although it does make it easier to track criminals. So it perhaps helps small time crooks and harms sophisticated ones. But if you're sophisticated enough you'll just switch back to cash. So I'm not sure why it's still permitted, aside from the legal difficulty of suddenly banning something you've already allowed for so long.
Then again, over the last several years long term treasuries have been an even more harmful pump n dump scheme (orchestrated by the Fed) due to their scale.