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Crypto exchange AAX suspends withdrawals

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Re: Crypto exchange AAX suspends withdrawals

#111

Post by JumpCrisscross »

constantcrying wrote: post #85
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…

An exchange shouldn't count deposited crypto as their asset. It is an asset of their customer. I do not think the actual problem here is crypto exchanges being unprofitable. Even if a crypto exchange goes under, it could (and frankly should ) still be able to go under gracefully, e.g. letting all customers withdraw their assets for a month (and E-Mailing private keys as a last resort). The issue here is crypto exchan…

> exchange shouldn't count deposited crypto as their asset

An exchange shouldn’t have deposits. That’s a word for banks and brokers. In practice, these shops act like funds.

Re: Crypto exchange AAX suspends withdrawals

#112

Post by zmgsabst »

spywaregorilla wrote: post #72
flanked-evergl wrote: post #42

Earlier quoted context omitted.

In the real world all organizations are regulated and fraud is illegal. But sadly something being illegal does not prevent if from happening, and greasing political palms always help: https://fortune.com/2022/11/10/sam-bankman-fried-ftx-joe-bid... ( https://archive.ph/BBpQN#selection-417.0-424.0 ) > The 30-year-old Bankman-Fried has been a major force in Democratic politics, ranking as the party’s second-biggest indi…

SBF spent about 33% Republican / 66% Democrat EDIT: Not accurate ^ Yet 18 of the 25 top donors were Republican leaning. Billionaires comprise 20% of Republican funding vs. 14% for Dems. Most republican megadonors were entirely republican. The big ones are from hedge funds. So yeah, SBF donated to the dems. We need more regulation to get money out of politics. But let's not kid ourselves into thinking the republican p…

SBF spent 99.9% Dems and 0.1% Repub, according to your first link.

You’re telling untrue facts according to your own sources — to minimize that the second largest Dem donor was a criminal stealing customer funds. Your comparison to Repubs is unfounded as none of their donors engaged in organized crime like SBF.

Why are you spreading election misinformation?

Re: Crypto exchange AAX suspends withdrawals

#113

Post by TheOtherHobbes »

bparsons wrote: post #78
endorphine wrote: post #48

Earlier quoted context omitted.

Why do you believe that is the case? How is this hypothesis explained?

It is only an attractive investment when the world is awash with excess fiat currency.

Which is when you get bubbles of all kinds. Because with a bit of painting snd decorating - and wishful thinking, of which there is always plenty - you can make almost any bubble look like a safe profitable investment.

Then the tide goes out and everyone says "How could this have happened?"

Again.

It's all suspiciously faith-based and aggressively anti-realistic.

Re: Crypto exchange AAX suspends withdrawals

#114

Post by detaro »

culanuchachamim wrote: post #95

I'm sorry for the ignorance, but why a crypto exchange is expected to keep the money of the customers in case they want to change back their crypto, and it's not like a regular exchange house where you exchange one currency for another currency, and once the transaction was made, they not obligated to exchange back.

It's not expected to exchange back, it is expected to give back cryptocurrency deposited there.

Re: Crypto exchange AAX suspends withdrawals

#115

Post by XCSme »

anticristi wrote: post #109

Pardon for living under a rock, but why are crypto exchanges affected by the mood in the crypto market? I thought that a crypto exchange functions like a currency market: I put an offer to sell 10,000 EUR for 1 BTC and someone else puts an offer to buy 10,000 EUR for 1 BTC. When orders cross, a transaction happens and the exchange gets a fee, whether in currency or crypto units. What are crypto exchanges fundamentall…

I think they are more like a bank, when everyone wants to withdraw at the same time, bad things happen.

Re: Crypto exchange AAX suspends withdrawals

#116

Post by vbezhenar »

anticristi wrote: post #109

Pardon for living under a rock, but why are crypto exchanges affected by the mood in the crypto market? I thought that a crypto exchange functions like a currency market: I put an offer to sell 10,000 EUR for 1 BTC and someone else puts an offer to buy 10,000 EUR for 1 BTC. When orders cross, a transaction happens and the exchange gets a fee, whether in currency or crypto units. What are crypto exchanges fundamentall…

Crypto exchanges always have lots of money because plenty of people keep their money inside. Those lots of money are getting withdrawn by owners and spend. It would be stupid not to do so. Free money yo. It works as long as exchange grows (more money to spend) or at least does not shrink. It stops working when lots of people want to withdraw their assets which are already gone. Time to hide.

Re: Crypto exchange AAX suspends withdrawals

#117

Post by benjaminwootton »

anticristi wrote: post #109

Pardon for living under a rock, but why are crypto exchanges affected by the mood in the crypto market? I thought that a crypto exchange functions like a currency market: I put an offer to sell 10,000 EUR for 1 BTC and someone else puts an offer to buy 10,000 EUR for 1 BTC. When orders cross, a transaction happens and the exchange gets a fee, whether in currency or crypto units. What are crypto exchanges fundamentall…

Firstly, people keep their Crypto with the exchange for trading purposes and because it is easier than self custody. This means if the exchange goes bankrupt they potentially lose their money.

Secondly, as it is an unregulated space, we have instances such as FTX where they were using clients funds which should be segregated. This arguably crosses into fraud, and we do not really know which exchanges have been doing this and which ones have been properly segregating client funds. Coinbase is probably the only one we know for sure as they are an audited US publically traded company.

Finally, we also have situations where exchanges are doing things such as not matching client deposits to their reserves 1-1, or hold those reserves in less liquid investments. This could range from another fraudulent situation to good practice, but leaves them very exposed to situations where everyones wants their money back now.

Re: Crypto exchange AAX suspends withdrawals

#118

Post by danaris »

tinco wrote: post #108
constantcrying wrote: post #85

Earlier quoted context omitted.

An exchange shouldn't count deposited crypto as their asset. It is an asset of their customer. I do not think the actual problem here is crypto exchanges being unprofitable. Even if a crypto exchange goes under, it could (and frankly should ) still be able to go under gracefully, e.g. letting all customers withdraw their assets for a month (and E-Mailing private keys as a last resort). The issue here is crypto exchan…

You can say that, but when MtGox went bankrupt, and also lost 4 fifths of its stored crypto, the court just heaped together all assets into one big pile and all creditors into one big pile and let them fight it out. So now there's a bunch of assholes including but not limited to Peter Vessenes, that are suing the bankrupt entity for billions (completely frivolous of course) and all the depositors have waited for 8 ye…

And that's largely because of the lack of regulation that so many cryptocurrency fans tout.

If it's not legally regulated as a currency, or a security, or anything of the sort, then why would it be considered to belong to you, and not Mt Gox, once you've given it to them?

All you have is a digital account that's basically the legal equivalent of an IOU on a napkin.

Welcome to your libertarian utopia.

Re: Crypto exchange AAX suspends withdrawals

#119

Post by gzer0 »

"At this point I'm convinced Satoshi Nakamoto was actually a public administration professor trying to teach kids why financial institutions have the rules in place that they do.

Given enough time, the entire crypto space will have reinvented every regulation they tried to get rid of and understood why they existed in the first place."

Re: Crypto exchange AAX suspends withdrawals

#120

Post by yonixw »

anticristi wrote: post #109

Pardon for living under a rock, but why are crypto exchanges affected by the mood in the crypto market? I thought that a crypto exchange functions like a currency market: I put an offer to sell 10,000 EUR for 1 BTC and someone else puts an offer to buy 10,000 EUR for 1 BTC. When orders cross, a transaction happens and the exchange gets a fee, whether in currency or crypto units. What are crypto exchanges fundamentall…

For FTX, turns out they called themselves "crypto exchange" but lent the money just like a bank, making them, surprisingly, vulnerable to bank run, which happened.

Unfortunately, this is common, just like $LUNA called themselves "stable coin" but it was stable only against assets in the crypto that were not stable at all.

Live by "Do your own research" and die by it. I guess.

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