Binance commingled customer funds and company revenue, former insiders say

https://www.reuters.com/investigates/special-report/crypto-binance-money/

by momentmaker • 3 years ago

221 249 3 years ago

jqpabc1233• 3 years ago

Color me surprised.

There is no accountability or recourse of any kind in cryptoland. You and your money are totally at the mercy and trust of the exchanges.

radiox_eth• 3 years ago

This is true only if you keep your funds in an exchange instead of your own wallet.

jqpabc1233• 3 years ago

No, this is still true.

Even with your own wallet, the exchanges set the value of what is in it. Even if you trade P2P, the exchanges are still an overarching influence and can easily manipulate prices as they see fit using their unlimited supply of "stable coins".

Face facts, cryptoland is owned by the exchanges. They operate with all the power of the Federal Reserve minus any oversight or accountability. There is nothing accountable or transparent or "free market" about it. When trading crypto, you are totally at their whim and mercy.

reducesuffering• 3 years ago

Ya, then in your own wallet, you're just waiting for the inevitable hack to lose it all, like one of the bitcoin core devs. https://siliconangle.com/2023/01/02/bitcoin-core-developer-l...

fakedang• 3 years ago

Isn't this what they also accused FTX of doing?

djbusby• 3 years ago

FTX also spent the customer money on themselves.

fauxpause_2• 3 years ago

Give them time

aww_dang4• 3 years ago

More importantly, FTX couldn't make customers whole during an exit stampede. As long as there is no rush to the exits or until there is, the entire issue is relatively irrelevant.

boeingUH60• 3 years ago

Nothing to see here. This is a reputed and transparent financial institution. The government is just jealous of having competition.../s

Binance has no known headquarters or transparent books. If you keep money there and you lose it, it's your fault. The same applies to Tether. You're only betting on trust instead of regulations, which never bodes well in the long run.

As a side note, Binance was founded in 2017 and grew to process hundreds of billions of dollars in transactions in a few years. In a hypothetical world as the CEO of such company, how would I even handle such growth without my mind exploding?

roenxi• 3 years ago

I work on the theory that any crypto firm is a gang of thieves run by charlatans.

However, the regulated banks also appear to be gangs of thieves run by charlatans. Except everyone is forced to signal, financially, that they have confidence in firms when they turn out to be insolvent. And the people involved with crypto can't be forced to bail out Binance unless they trust them with their funds. I have a lot more faith in the value of my Monero than the USD - which I say for rhetorical effect since I don't trust the USD enough to own any.

Silicon Valley Bank has detoothed a lot of criticism of the crypto industry, and it hasn't even been the biggest collapse this year. Then there is the inflation problem that that fiat currencies have which is on display right now.

smcl14• 3 years ago

I have a lot more faith in the value of my Monero than the USD

I've heard people say this about various cryptocurrencies over the last few years and I just cannot take the statement seriously. It just always comes across as a deliberately exaggeration of belief in a cryptocurrency in an attempt to persuade others to get in on it. Not only that, I cannot imagine a world where USD collapses and somehow things like Monero or Ethereum stick around and continue to work just fine.

zie• 3 years ago

The difference is, the US govt has backstopped all the bank charlatans and put their money and their citizens money on the line when it comes to USD backstopping.

The Binance CEO wouldn't backstop his firm any farther than he can throw his yacht.

BLKNSLVR3• 3 years ago

It's difficult to name a large financial institution that hasn't had a fairly recent "embarrassment of behaviour discovery", be it assisting drug cartels with money laundering, manipulating the price of gold / metals, or just plain immorally giving massive debt to obvious deadbeats and repackaging it with a AAA rating. Yhe whole finance industry is a festering wound.

Cryptocurrency, by comparison, is a mosquito bite, but there's enough blood to have started attracting the real bad bacteria across from the traditional finance world.

PeterisP2• 3 years ago

It's a reasonable expectation that any and all institutions handling your money might be gangs of thieves run by charlatans. This is why any deviations from regulation should be viewed with extreme suspicion, since that's the only thing that mostly succeeds keeping these thieves and charlatans in check and protecting customers.

Silicon Valley Bank is a great positive example, where the depositors were protected even despite the fact that the thieves and charlatans wanted to take on unacceptable risk by successfully managing in 2018 to lobby exemptions to the Dodd-Frank regulations that would have prevented the thieves and charlatans from doing so. So any financial institution that tries to circumvent even slight parts of regulations should be treated with extreme suspicion (as thieves and charlatans who want to take your money), and any financial process which tries to stay outside regulations as such (e.g. Monero) needs no suspicion at all, as this means that they're explicitly publicly acknowledging that yes, our gang of thieves and charlatans want to re-enable the ways of taking your money which were limited for the other gangs of thieves and charlatans.

ourmandave• 3 years ago

However, the regulated banks also appear to be gangs of thieves run by charlatans. ... I have a lot more faith in the value of my Monero than the USD

Ah yes, Monero. Trying to replace bitcoin as the preferred dark web currency when collecting ransoms from hospitals and pensioners.

A few banks went south, so the entire system is just as bad as the ponzi crypto circus run by the Tether mafia?

pjc503• 3 years ago

I'm reminded of this: https://finance.yahoo.com/news/balaji-srinivasan-lost-1-mill...

Man bets on hyperinflation, obviously loses, and to the surprise of almost everyone it pays out. I'm fairly sure you yourself have been banging on about USD hyperinflation for years, too, without it happening.

JAlexoid7• 3 years ago

Silicon Valley Bank has detoothed a lot of criticism of the crypto industry

The problem with SVB was not the same as what we get with FTX and Binance. Let alone, the promise of crypto is to "be transparent", and this proves that they are not at all transparent.

SVB made bad bets, that we knew were made. SVB collapse was not a result of them lying about how they operate, it was a result of the risk they took.

FTX and Binance lied, which is not exactly what you want from someone who you should trust.

nailer2• 3 years ago

A hundred percent. Most smart people that work in web3 avoid any kind of long term balance in USDT

nailer2• 3 years ago

If anyone is unaware: https://youtu.be/-whuXHSL1Pg

rchaud2• 3 years ago

Their offices are so transparent, one would think they're not even there! /s

mrguyorama7• 3 years ago

Ain't it funny how a system supposedly designed to prevent a need to trust anyone only functions to it's current barely functional level if you trust a giant, centralized, opaque organization that has on the public record lied in the past about pretty serious things?

amadeuspagel3• 3 years ago

Bitcoin functions perfectly without Binance or any centralized exchange. Centralized exchanges are necessary as interface between the centralized world of traditional finance and the decentralized world of Bitcoin.

JumpCrisscross5• 3 years ago

The big risk for Binance is AML. If they’re violating U.S. sanctions, they’re liable to having their funds frozen and ability to access dollars in blocked.

fastball• 3 years ago

Their KYC is actually pretty strict. They have a separate entity for US customers, which I assume doesn't violate US sanctions.

onlyrealcuzzo• 3 years ago

Too little, too late.

Part of KYC is also not sending dollars to sanctioned international corporations & individuals as well.

diab0lic2• 3 years ago

It is anything but strict. In fact they’ll help you circumvent it.

https://amp.cnn.com/cnn/2023/03/27/business/binance-cftc-law...

teknopurge2• 3 years ago

The content in article doesn't even satisfy the headline/title. The quotes in the article specifically state what the accounts are for but the author hand-waves on what "could" be if many hypotheticals are reality. Do better Reuters.

JumpCrisscross5• 3 years ago

content in article doesn't even satisfy the headline/title

How does “the news agency reviewed a bank record showing that on Feb. 10, 2021, Binance mixed $20 million from a corporate account with $15 million from an account that received customer money” not satisfy the headline?

teknopurge2• 3 years ago

According to the sources and the February 2021 bank record seen by Reuters, Binance mixed customer money and company revenues in a third Silvergate account, belonging to a Zhao-controlled Cayman firm. Binance converted money from this third account into the dollar-linked token BUSD, according to the person with knowledge of Binance’s group finances and company messages
These accounts were not used to accept user deposits; they were used to facilitate user purchases” of crypto, said spokesperson Brad Jaffe. “There was no commingling at any time because these are 100% corporate funds.” When users sent money to the account, he said, they were not depositing funds but buying the exchange’s bespoke dollar-linked crypto-token, BUSD. This process was “exactly the same thing as buying a product from Amazon,”

The article has a lot of details and infographics - but ends with no conclusion, just guesswork. I appreciate the work and time that went into an article like this - it would be nice if it was more factual and less "blind-sourced" extrapolated hypothesis.

smoovb2• 3 years ago

"Binance, commingled customer funds with company revenue in 2020 and 2021, in breach of U.S. financial rules"

Guess it is fortunate for them they are not a US company governed by U.S. financial rules.

mikeyouse• 3 years ago

Alas, if you serve US customers (which they do) you need to abide by US financial rules.

smcl14• 3 years ago

This would also be an issue in the UK too - mixing client money with company money is a big no-no. I imagine plenty of other countries have similar regulations.

smoovb2• 3 years ago

Binance US, separate entity, serves US customers. Binance from the article does not.

raverbashing• 3 years ago

Except this is more akin to "don't serve food that was left under room temperature for a day" than an arbitrary procedural US-rule.

dragonwriter3• 3 years ago

In the same way that European data protection regulations apply to firms with European person’s data, even if they aren’t European firms, US money protection regulations apply to firms with U. S. people’s money, whether or not they are US firms. And, also from the article:

“Binance allowed U.S. customers to trade on its platform from 2019 to this year despite publicly claiming to restrict access to Americans, the U.S. Commodity Futures Trading Commission alleged in a complaint against the exchange in March.”

NelsonMinar• 3 years ago

"commingling happened almost daily in accounts the exchange held at U.S. lender Silvergate Bank"

The very next sentence in the article. If you're going to quote, quote with context.

"Binance allowed U.S. customers to trade on its platform from 2019 to this year"

NovemberWhiskey2• 3 years ago

Well, OK, sure but the same basic rules are present in (for example) the UK, Hong Kong, Singapore ... the Bahamas ... I mean, I am sure you can find some craptastically-regulated country somewhere which doesn't have client money rules but still.

rsynnott• 3 years ago

I mean, commingling is verboten pretty much everywhere.

HissingMachine• 3 years ago

Nobody trusts banks, but these crypto characters make banks look like solid organizations.

brookst3• 3 years ago

The magic of banking is that retail depositors don’t have to trust them.

mhluongo• 3 years ago

Eh, the FDIC is $250k per account, and total coverage in the fund is pretty small. I'd think we'd stop making blanket statements like this after seeing a couple large bank failures back-to-back in the US. If there are more, we won't be able to make all retail depositors while without significant additional tax revenue or currency debasement.

complianceowl• 3 years ago

Banks require us to give them large amounts of trust. We deposit our money. They lend that money out, while the general public is under the impression that you deposit money and it stays there. The bank's very business model relies on all of their depositors not needing/withdrawing their money at the same time; should everyone happen to need/withdraw their money at the same time, the bank would fail. Fractional reserve banking at its finest.

WinstonSmith842• 3 years ago

You're right, we don't have to trust them, because we know we cannot trust them. Regular banks are not keeping your money ready for you to withdraw. They are investing your money (the profits are for them, the losses are for the taxpayers), while they hope that not everyone want their money at the same time. Binance is accused to mix customer funds with their own funds. If it were a bank, that would be essentially a given. Not necessarily defending Binance, but ...

BLKNSLVR3• 3 years ago

Nope. Banks are just the devil you know, so they get more of a free pass. You're desensitised to banks, but sensitive to anything else that may end up being "just as bad" as the banks.

Banks already exist, don't inflict more similar behaviour on us! Please!

aww_dang4• 3 years ago

Are the improprieties of a cryptocurrency exchange more scandalous relative to the improprieties of traditional finance?

BLKNSLVR3• 3 years ago

I'll say no, but only because cryptocurrency is a single toddler to traditional finance's group of cigar smoking, sociopathic men with the scars to prove they've learnt through experience how far they can stray from legal boundaries before too much attention is brought.

aww_dang4• 3 years ago

Feels like tradfi's improprieties are normalized. They're adjacent to or in bed with government's financial abuses, which are politicized and sometimes portrayed as just.

nologic01• 3 years ago

Its a pity that a decade and more of hyperactivity, speculation and noise in cryptofinance will not leave much to show for it but the smoldering ruins of bizarre house-of-cards.

We have financial systems that are certifiably broken, there are countless ideas about how to fix them, the digital era makes new ideas easy to explore and everybody would objectively be better off with some genuine innovation

yet all we've got is this manic obsession spawned by bitcoin that has no economic objective whatsoever.

If that is "efficient allocation of capital" one wonders what inefficiency looks like.

Tyrek• 3 years ago

It's difficult to claim that any system is 'certifiably broken' until you can actually point to an actual effective real-world implementation of a 'better system' (pareto or otherwise), no?

ouid3• 3 years ago

No.

What?

Say you're trying to invent a lightbulb. The first one ever, and it explodes when you plug it in. How would you describe its state?

pjc503• 3 years ago

Nah, it's definitely possible to point out failings in systems even before they're implemented, without having to prove that a better solution exists. It might not exist! You might just have to put up with an inadequate solution if it's better than nothing.

TheRealPomax• 3 years ago

Nope. That's a really weird way to think about when you're allowed to call things broken. You can observe the effects, and with clear precision explain exactly what's broken just by looking at the thing itself.

wmf2• 3 years ago

Brazil has a better payment system than the US. Brazil!

DANmode• 3 years ago

Do you separate the value of Bitcoin from the value of Binance, and Binance's coin?

Eisenstein7• 3 years ago

What is the value of Bitcoin if you can't separate it from its uses?

boringg3• 3 years ago

It's a great use case for economics textbooks describing human-market behavior with modern technologies to help add fuel to the fire. It will replace tulip mania for a more recent experience. However the cost of that use-case was way to expensive for its net benefit.

WeylandYutani3• 3 years ago

It's intensely sobering isn't it? People haven't changed in 500 years. Still greedy. Still stupid. Still FOMO.

yieldcrv• 3 years ago

alternatively, the tulip mania lasted for like 3 months, was also due to government regulations of the futures market, and there is no learning on what would have happened as the humans died due to the bubonic plague, so its the sort of the worst example of irrational exuberance despite its oft citing

Bitcoin has a sustained 13 year wave, at far greater in amplitude than tulips, and spawned many bubbles along the way of even greater amplitude given the even shorter time periods, and now sustaining even during a period of quantitative tightening

astoor• 3 years ago

The irony is that Bitcoin was created in direct response to the perceived shortcomings of the traditional financial system (see the message in the genesis block), but since then the traditional financial system has cleaned itself up enormously, while cryptocurrency has had the exact opposite trajectory and is now nothing more than a magnet for actual or latent fraudsters.

pjc503• 3 years ago

Bitcoin addressed at most one issue in finance, without properly tying it to the financial crisis, and since then has reinvented all the others in a massive Chesterton's Fence speedrun. It's been nothing but "oh, so that's why the rules are that way" since then.

sph13• 3 years ago

the traditional financial system has cleaned itself up enormously

I beg your pardon? Because we haven't heard of any Madoff or subprime loans lately, you are willing to say that with a straight face?

gillesjacobs• 3 years ago

CeFi is not a cryptocurrency technology and thus is cannot solve shortcomings of the traditional financial system because it is the traditional financial system.

Noone who is ideologically consistent with the crypto ethos would expect that ideology overrides greed.

psychlops4• 3 years ago

What do you believe tradfi has done to clean itself up? Please address how the astonishing amounts of global inflation (which I assume will be in your answer) are a good thing for everyone.

rohith25062• 3 years ago

Sitting on the sidelines, It makes us feel superior to criticise and derive intellectual pleasure out of that but I haven't seen a lot of people who actually step into the ring and try to fix what's broken. I was one of them.

We can all agree that the current traditional and digital finance systems are broken but I don't see any solutions being provided as an alternative.

In every industry which involves innovation, there will be speculation and definitely people who like to profit off that which results in ponzi schemes but in the end, there are some genuinely hard working people who truly believe in the mission they signed up for 10 years ago and still continue to work. I would suggest you to take a look around and dig deeper into some of the blockchain projects and you will understand how much blood, sweat and bits have been poured into this.

cube22223• 3 years ago

We can all agree that the current traditional and digital finance systems are broken [...]

Could you expand on that? That's quite a strong opinion to assume everybody agrees on.

JAlexoid7• 3 years ago

We're also privileged to be closer to understanding the systems and solutions. That makes it easier for us to view the massive amount of issues with the ecosystem as not the core of the cryptocurrency "craze".

Now imagine you're not a techie, that has no idea what's what? The propaganda concept of "rotten herring", that mars the whole, will take effect on the whole cryptocurrency concept.

For laypeople cryptocurrency is as much a mystery with it's own gatekeepers, as fiat money systems. Engineers becoming the gatekeepers, are definitely more open an excited about it... but to others swapping a banker to an anonymous engineer is not much of an upgrade.

So many gatekeepers have failed in providing essential protections that old gatekeepers still provide.

Crypto made fraud and mismanagement obvious and grandiose, even though the exact same happens with traditional financial system.

Technology can't catch on just because "there are some great projects"

Veen• 3 years ago

I wonder if it occurs to people who "try to fix what's broken" that things are as they are for a reason, and it might be a good reason, a series of compromises and hacks necessary to create a system that is far from perfect, but that more-or-less works.

There are no doubt many things wrong with our financial systems, but I suspect they'll be fixed by gradual evolution that maintains what works, and not by a revolution that seeks to replace what we have with something that sounds good from a naive perspective, but is in reality much worse.

rjmunro• 3 years ago

We can all agree that the current traditional and digital finance systems are broken

No we can't. I think the traditional and digital finance systems fundamentally work quite well. It's not all perfect, but it mostly works.

8note• 3 years ago

We can all agree that the current traditional and digital finance systems are broken but I don't see any solutions being provided as an alternative.

Do we all agree? I think the traditional system is pretty good, and attempts to remove or bypass good regulation are steps in the wrong direction.

JeremyNT• 3 years ago

Its a pity that a decade and more of hypeactivity, speculation and noise in cryptofinance will not leave much to show for it but the smoldering ruins of bizzare house-of-cards.

Weirdly, there's still plenty of speculation in this space, and still plenty of people getting rich off of it. Look at the price of bitcoin for example, it's rebounded substantially since the FTX collapse. People have become millionaires from this nonsense and a great many people seem to feel like there's still a lot of value.

I just don't understand it at all at this point. I understand how people would have been duped by the scams before all of the prominent failures, but why are people still willing to trade crypto for so much actual money?

dragontamer4• 3 years ago

it's rebounded substantially since the FTX collapse

Who cares about the price? Seriously. Its not that important.

What are the systems in place to prevent another FTX-like collapse in the bitcoin space? Answer: None. In fact, Tether remains a fully unaudited, potential house-of-cards, situation.

People aren't worried about the price going up or down. Its really not that important. People are worried about losing $X0,000+ as the next random exchange or cryptocoin-service collapses randomly.

It has become abundantly clear that not only is cryptocoin vulnerable to incredible collapses of financial services... but the cryptocoin community is wholly uninterested in solving that problem. Mt. Gox collapsed. Celsius collapsed. Voyager collapsed. FTX collapsed. Each situation, individuals lost anywhere from thousands, to millions, of dollars in one fell swoop.

-------

Meanwhile, every SIVB and First Republic Bank customer has been made whole. Yes, the banks collapsed, but no one actually lost any money over it. In fact, the mainstream banking collapses occurred over the weekend (when the banks were closed anyway), and everything was fixed by Monday Morning.

I'm not necessarily saying that an "FDIC-of-cryptocoins" needs to be setup. But the cryptocoin community needs to come together and figure this crap out... how to provide assurances to the public that these systems are safe and worth using.

olalonde3• 3 years ago

Same reason as the last 5-6 crashes. People still believe in its potential or are using it to transact today. Bitcoin is not a "bizare house-of-cards" anymore than the web was after the dot-com bubble. All the failures you have heard of were fraudulent or badly run businesses that had very little to do with the actual protocol.

worrycue2• 3 years ago

I just don't understand it at all at this point. I understand how people would have been duped by the scams before all of the prominent failures, but why are people still willing to trade crypto for so much actual money?

Probably the same reason people throw money at casinos. Despite tales of people losing the shirts on their backs, there are also those that hit the jackpot. The biggest winners are of course the casinos who facilitate the transfer of wealth between the aforementioned groups while directly or indirectly taking a nice cut for themselves.

jredwards• 3 years ago

I have never understood Bitcoin from a speculative investment perspective. I've always been a crypto doubter and often a cryto hater. And yet here I am still thinking to myself "If only I'd bought in at X price...."

olalonde3• 3 years ago

We have financial systems that are certifiably broken, there are countless ideas about how to fix them

You can trace back almost everything that is broken in financial systems to government regulations. It's not a technical problem. The only technical solution is to build a decentralized system that is difficult to regulate (aka Bitcoin). Its "economic objective" is to replace those traditional systems.

mrguyorama7• 3 years ago

Ah yes, not like we have tried to deregulate finance in any way and had three "once in a generation" economic events in 20 years.

Maybe, just maybe, the damn actor from california didn't know much about economics?

Nah, obviously fintech just wasn't free enough to explore weird money games!

RestlessMind7• 3 years ago

I hate scammers in the crypto space as much as anyone else. And it feels good at some level to see them getting flushed out in the current environment. Having said that

cryptofinance will not leave much to show for it

I completely disagree with this. I can confidently bet that Bitcoin's price will cross 50K USD in the next 5 years, and 100K in the next 10 years. I am personally putting my money where my mouth is.

aww_dang4• 3 years ago

The financialization of the economy is downstream from central bank policy.

You cannot divorce the existing financial system from cryptocurrency. Rampant speculation and bubble mania isn't happening in a vacuum. Rather, it is a symptom of easy money and cheap credit. When regulators remove barriers to a natural rate of credit by no longer centrally planning interest rates, speculative mania will be naturally disincentivized.

amadeuspagel3• 3 years ago

It's curious to make this connection between lack of innovation in the financial system and bitcoin. Maybe there's no innovation in the financial system because that system lacks competitors? Or because there's no way to try things out? Bitcoin should help either way. There's some movement towards Fed bank accounts, and I expect Bitcoin to help there — if there's a serious threat of Bitcoin replacing the US dollar, then maybe the interests of banks will seem less important.

jmull• 3 years ago

"the term ‘deposit’ is a communication term, it’s not an indication of the technical treatment of the funds"

That seems like a pretty terrible answer from binance. It's like they are saying, "We're not commingling customer funds and company revenue! We're defrauding our customers by misrepresenting purchases as deposits!"

JAlexoid7• 3 years ago

For all the great promises and actually great ideas behind using cryptography to ensure efficient flow of funds... it has become scammers' paradise.

jandrese2• 3 years ago

Bitcoin is many things, but "efficient" has never been one of them. Today if you wanted to send $10,000 to someone in a different country it would be less wasteful and environmentally harmful to cut down a tree and process it into cardboard, put the cash in that cardboard box, and put that on a fossil fuel burning airplane to fly it halfway across the world and hand deliver it to the person.

londons_explore2• 3 years ago

There is no business advantage to co-mingling funds...

So why do it? The only benefit appears to be that you don't need to do precise/accurate accounting and it's easier to hide fraud.

ineedasername3• 3 years ago

In this case the business advantage may simply have been that it was much easier to avoid following the rules while growing from its start 2017 to (at times) > $50B in holdings. They simply didn't care enough to devote the resources needed, i.e., apathy (and even antagonism) towards the normal business protocols.

That's assuming it wasn't done for less honest purposes.

londons_explore2• 3 years ago

I never understood why commingling was illegal.

Instead, simply require that if any customer funds and corporate funds are in the same account, then customers have priority in any liquidation of the contents of that account.

Then, companies have an incentive to separate their funds, but don't need to.

runako• 3 years ago

I never understood why commingling was illegal.

The answer is straightforward. It is obviously possible to spend all of the money in an account. This is bad if some of that money was customer money which the fiduciary was not supposed to spend.

Spending all the money in an account can be the result of bad business decisions. But equally, it can be the result of a series of negative events. For example, a business line of credit could pledge as security funds in an account. Later, the business runs into trouble due to rare macro events (e.g. war, pandemic, natural disaster, etc.) and the loan goes into default. The creditor can then seize the funds in the account. It is better for customers if that pledged account did not contain their money.

customers have priority in any liquidation of the contents of that account.

Neither of the scenarios above results in the ability to prioritize in any kind of orderly liquidation. Bankruptcy will likely come eventually, but by the time the courts get involved all the customer funds are gone and unrecoverable.

Preventing commingling provides a mechanism for the fiduciary to fail without having lost all of the customers' money.

fdsafdsafdsklj2• 3 years ago

Customers have priority of the assets anyway, even if they're in a corporate account. The commingling rules help because by the time the funds in any commingled account would get frozen they'd already be gone. Look to SBF, Madoff, etc.

sph13• 3 years ago

Reading these comments on this radical anti-crypto forum makes me always think of "the rumours of [Bitcoin's] death have been greatly exaggerated."

While I don't have a Twitter profile with laser eyes just yet, I enjoy seeing what I think is a technological and political game changer just chugging along, uncaring of scams, maxis, haters, governments, volatility.

I am surprised that few can notice how impressive it is for a currency with limited usability and extreme volatility to still be worth something, improving and growing. Because at one point, all the concerns one has about it will have been solved, and, as economists love to say, good money tends to drive out bad money. The Internet is still in need of its digital cash.

So I enjoy seeing all the Ponzi schemers, con artists and grifters get their comeuppance, but would also love to see the crypto-Luddites inhabiting this forum to be proven wrong eventually. Because Bitcoin doesn't care, Bitcoin still goes brrr.

robin_reala3• 3 years ago

And will go brr until self-induced climate change kills off the human race. Proof-of-work coins are obscene and immoral, and you should feel bad.

sph13• 3 years ago

Yes, Bitcoin is what is causing climate change. Also stop eating meat.

You're repeating the propaganda lines from big corporation and big government, while they keep subsidizing oil companies and ultra-rich take their private jet to have dinner in Paris. Also it feels good to believe climate change is within our (we the people) grasp, and we just have to recycle a bit more.

This is literally putting the masses at each other's throats, while Unilever hopes to make billions if you buy their vegan products, and petrol companies go brrr.

Divide et impera.

Bitcoin turns energy into money. The problem is that we need more clean energy, not cry that people are using off-grid energy to mine Bitcoins.

Build more nuclear. Invest in fusion research. But you nor I can't, so we're at each other's throat. Saying we need to consume less energy is misguided and absurd.

dylkil• 3 years ago

What i find especially intriguing is the certainty some people on this forum have of crypto going to zero. The same certainty they had 2, 5 and 10 years ago. Yet here we are. At what stage do they start questioning the strength of their certainty.

xtracto2• 3 years ago

I don't subscribe to Bitcoin, I think it was a good Proof of Concept that this "Satoshi Nakamoto" entity released with good ideas that have since been tested and replaced by better ones.

I very well think that Bitcoin itself is going to zero, lest it migrates off PoW technolgoy. I am certain that at some point in the future governments will regulate and maybe even ban that wasteful use of electricity. Particularly when way better double-spending/integrity protection algorithms exist to replace PoW.

Nevertheless, Blockchains and crypto-tokens are here to stay. Ethereum is here to stay and similar networks will keep progressing, as GP said, without regard to scammers, fraudsters, naysayers and skeptics around the world. Technology will keep improving and becoming better performing. This is exciting to me!

enilakla• 3 years ago

Random but, what do you mean by ‘goes brrr’?

sph13• 3 years ago

Sorry, it's a meme: https://knowyourmeme.com/memes/money-printer-go-brrr

It means it keeps chugging along with no care in the world.

cs7022• 3 years ago

good money tends to drive out bad money

Actually, it's the other way around: https://en.wikipedia.org/wiki/Gresham's_law

But otherwise, I agree: rumors of Bitcoin's death have been greatly exaggerated.

See https://99bitcoins.com/bitcoin-obituaries/

sph13• 3 years ago

Interesting.

I was recently reading an essay from Hayek that explained why a better currency tends to drive out a bad one. I might need a refresher, though this seems to be one of those things that are true depending on how you look at it.

amadeuspagel3• 3 years ago

Greham's law only applies where people are forced to treat good and bad money as equivalent. For example, if people are forced to treat coins of the same denomination as equivalent, regardless of how much gold the contain, you'll spend those that contain less gold and keep those that contain more gold.

fdsadfsaklj• 3 years ago

Agree! It's a tiring situation. On the one hand you have the idealists who know bitcoin is going to radicalize everything because "the Internet needs it."

On the other you have the "radical anti-crypto(currency) ludites" who is anyone on this forum who holds a different opinion.

asin• 3 years ago

That's how businesses are run in 21st century. Lol

I bet US gov will go after binance/coinbase at some point this/next year

SkyMarshal• 3 years ago

They’re already going after Coinbase.

https://www.reuters.com/legal/coinbase-issued-wells-notice-b...

charcircuit• 3 years ago

Money is just a number in a database. Who cares if that number is over 1 account or split over more. It is equivalent.

im3w1l• 3 years ago

Yeah I'm inclined to agree. They shouldn't have done it, but this seems to be a case sloppiness rather than malice, and nothing actually bad seems to have came of it from my cursory reading. Just a bunch of playing up what could have happened.

figassis• 3 years ago

Binance’s website told customers their dollar transfers were “deposits” that would be “credited” to their trading accounts in the form of BUSD. Customers were told they could “withdraw” their deposits as dollars. These representations created the expectation that clients’ funds would be safeguarded in the same way as traditional cash deposits, the former regulators said.

So this makes sense to me in that users buy a deposit dollars to buy a shitcoin, but the deposit and purchase are a single operation. If I buy BUSD and then I want to withdrawn, I need to sell my BUSD back to Binance, and it it's value has drifted down, then I will get less dollars. How is that commingling and how is there ab expectation of safeguarding deposits?

worksonmine• 3 years ago

They've ramped up e-mail spam to the point that I unsubscribed and am going to delete my account. Can't be a good sign, be careful.

sub7• 3 years ago

Most crypto grifters have cashed out, moved on to other projects, and are keen for people to forget that chapter.

There is still a monumental amount of notional markups that need to be erased - this is not a real market and there is no real price discovery. The real $ have been round tripped many times over, I don't think there's a single "stablecoin" out there that's worth any constant amount.

Binance commingled customer funds and company revenue, former insiders say

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