Crypto exchange AAX suspends withdrawals • Hacker News Board

Re: Crypto exchange AAX suspends withdrawals

#61

Post by acomms » Mon, Nov 14, 2022, 2:12 PM UTC

djbebs wrote: post #10

lbriner wrote: post #7

Forgive my ignorance but it seems that one major problem with crypto-exchanges is that they don't necessarily have any assets other than the crypto that has been deposited there, which means all overheads (which I am assuming for some of these guys is $Ms/year) can only come from trading crypto unless they are charging reasonable money for the privilege of using their exchanges. In the FIAT world, banks make tonnes o…

There is nothing wrong with this, and indeed it's a good thing.

In a regulated market sure, but here they seem to be trading with customer assets - which is so much worse.

Re: Crypto exchange AAX suspends withdrawals

#62

Post by jwitthuhn » Mon, Nov 14, 2022, 2:12 PM UTC

speakfreely wrote: post #32

> Due to the failure of our third-party partner, some users' balance data were found abnormally recorded in our system. Hence, limiting our services to prevent further risks, the technical team has had to manually proofread and restore the system to ensure maximum accuracy of all users’ holdings. "Abnormally recorded" ... "prevent further risks" ... "manually proofread" ... "maximum accuracy". Wow.

That also really stuck out to me.

"We're aren't sure customer's recorded balances are accurate and it may be possible for money to simply appear or disappear in our system, but we definitely have enough money to pay out everyone's balance (which as already mentioned is inaccurate)"

Re: Crypto exchange AAX suspends withdrawals

#63

Post by rdtwo » Mon, Nov 14, 2022, 2:13 PM UTC

nannal wrote: post #41

flanked-evergl wrote: post #34

Earlier quoted context omitted.

I'm not aware of any crypto exchange that does not charge some manner of fees.

There are some 0 fees exchanges, often requires significant volume or occasionally it's for limited periods and/or on a small list of pairs, but I wouldn't be suprised that someone's running fractional reserve with an exchange and offers 0 fees because they make money elsewhere.

You have to be. There is no money to be made at 0 fee exchanges unless you lend the money out or give unfavorable swap rates

Re: Crypto exchange AAX suspends withdrawals

#64

Post by wg0 » Mon, Nov 14, 2022, 2:13 PM UTC

Whenever people need to withdraw, "systems can't handle load" is a constant theme with crypto exchanges or is this an overstatement?

Re: Crypto exchange AAX suspends withdrawals

#65

Post by mccorrinall » Mon, Nov 14, 2022, 2:13 PM UTC

nannal wrote: post #41

flanked-evergl wrote: post #34

Earlier quoted context omitted.

I'm not aware of any crypto exchange that does not charge some manner of fees.

There are some 0 fees exchanges, often requires significant volume or occasionally it's for limited periods and/or on a small list of pairs, but I wouldn't be suprised that someone's running fractional reserve with an exchange and offers 0 fees because they make money elsewhere.

Binance and bybit offer 0% fees on spot, but you usually want some kind of leverage, so you pay interest in your margin loan.

If you are not a small retail and want to trade crypto, you usually need to use futures - which are associated with fees - because of liquidity and tighter spreads.

Re: Crypto exchange AAX suspends withdrawals

#66

Post by jakelazaroff » Mon, Nov 14, 2022, 2:14 PM UTC

djbebs wrote: post #24

jakelazaroff wrote: post #14

Earlier quoted context omitted.

Is this… sarcasm? It’s a good thing that crypto exchanges are streaming their customers’ money?

I'm 100% serious. Exchanges are not and should not be banks. They should not be comingling their assets with client assets.

(*stealing their customers’ money, but I can’t edit it without making it seem like you’re replying to something else entirely)

Okay, but that’s only half of what OP said. They’re also trading on customer assets. That is an extremely bad thing no matter how you look at it.

Re: Crypto exchange AAX suspends withdrawals

#67

Post by tootie » Mon, Nov 14, 2022, 2:15 PM UTC

rapsey wrote: post #36

slaw wrote: post #20

Earlier quoted context omitted.

I recommend going off all crypto, not only on exchange.

Crypto has really only lived in a zero interest rate policy world and it is shitting the bed majorly now when rates are going up. It is likely far from the bottom.

Is it? There's no reserve rate on the books but there's still a natural interest rate. And I'd estimate that for something like Bitcoin it's sky high. That's how it produced massive returns with no equity or assets. When Bitcoin was first launched, economists said the mining and splitting algorithm would be massively deflationary and that seems to have come true.

Re: Crypto exchange AAX suspends withdrawals

#68

Post by chitowneats » Mon, Nov 14, 2022, 2:15 PM UTC

throwup wrote: post #38

jallasprit wrote: post #8

The warning bells should be going off in the entire crypto sector right now. If you have money in crypto, I'd strongly recommend going off-exchange

Not your keys, not your cheese. It's sad how many people have to learn this the hard way.

Also not your cheese if you bought BTC any time in the last few years. Without the exchanges, and especially without investor confidence, the days of wild speculation are ending. The price is going to continue to fall and everyone with BTC in their personal wallets gets to take a haircut too.

Re: Crypto exchange AAX suspends withdrawals

#69

Post by rchaud » Mon, Nov 14, 2022, 2:15 PM UTC

brnt wrote: post #33

So, having been around since the early bitcoin days, core to the salespitch back then was the fact you would have control. You'd have your coins in your wallet, and no need for banks etc. Apparently nobody does this anymore, and gives their wallets to these exchanges (i.e. banks) and balks when the obvious happens in pyramid schemes. People just don't get distributed currency if they promptly undistribute it. Or is i…

> Apparently nobody does this anymore, and gives their wallets to these exchanges (i.e. banks) and balks when the obvious happens in pyramid schemes.

The name of the game is pump and dump, you can't play the game (speculation) if you're not on the field (the exchange).

Crypto's marketing is 'financial freedom' as in get-rich-quick, not free as in libre.

Re: Crypto exchange AAX suspends withdrawals

#70

Post by PaulHoule » Mon, Nov 14, 2022, 2:17 PM UTC

benj111 wrote: post #58

itake wrote: post #15

Earlier quoted context omitted.

> Is there any reason someone would take out a loan in crypto and pay interest on the repayments? People want to increase their exposure to crypto via leverage. For example: 1. Collatorize BTC to get USDT 2. Use the USTDT to buy ETH. 3. Use ETH to collatorize to get USDT 4. Use USDT to buy sh*tcoin 5. wash, rinse, repeat If everything goes up, you can make a ton of money. If things go down... you lose everything.

Or the opposite. Short bitcoin or whatever

It's pretty dangerous though. Even though crypto is mostly on the way down and out some coins will predictably lurch upward from time to time.

If you hold an asset long you have a finite potential for loss but infinite potential for gain. Short it's the other way around. Algo traders and hedgies often treat short and long positions as symmetrical as they almost are when linearized but over long periods of time and large princemovements that's wrong. It leaves you with the hedgie viewpoint that it's as bad a "risk" that the stock market goes up too much as if it goes down which is not the way most people think.