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Crypto exchange AAX suspends withdrawals

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Re: Crypto exchange AAX suspends withdrawals

#121

Post by oldgradstudent »

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…

> The issue here is crypto exchanges severely mismanaging the assets of their customers.

"Severely mismanaging" is a euphemism for fraud and theft, right?

Re: Crypto exchange AAX suspends withdrawals

#122

Post by eternalban »

knorker wrote: post #79
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…

You're not taking crazy pills. It's become abundantly clear that the vision of everybody being their own bank will never work. People don't want to be their own bank, just like they don't want to be their own bakery, or their own farmer. Sure, some people do bake their own bread, but they do it either because they have to, or because they enjoy it. So the people who control their own keys need to have a reason to do…

> Basically: If you already have a bank, why would you not just use it?

Basic corollary: if you already use a bank, why not just use money?

> If there were FDIC for tokens at your real bank, redeemable in same number of tokens, then any general public that wanted to use cryptocurrency would likely just use that. Because outside of fringe LARPing nobody wants to run their own bank.

So the only remaining question is why would normies who say (according to you) amen to all above would need crypto besides a ponzi-speculative joy ride?

On one hand we have funny money backed by a world power and all its resources, and protected by ICBMs and an impressive navy and bases around the world and a financial infrastructure around USD & convertibles.

On the other hand we have funny tokens issued by "genius" -mushrooms- who are elevated into the spotlight by the likes of Forbes magazine and the rest of the media circus, protected by nothing [though the genius scammers themselves are apparently protected ..]

Re: Crypto exchange AAX suspends withdrawals

#123

Post by ffmpegy »

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…

crime.

Re: Crypto exchange AAX suspends withdrawals

#124

Post by djbebs »

manholio wrote: post #82
djbebs wrote: post #24

Earlier quoted context omitted.

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

Yes, exchanges shouldn't commingle their assets with clients funds, yet they have large operational outlays (coding &security, traditional financial fees, meth & luxury condos in Bahamas, etc.) that seem unlikely to be coverable with trading fees alone. Even if we allow them to work like banks, they still can't seem to justify the tens of billion valuations.

If the fees aren't enough to cover it then the company isn't profitable and should shut down.

Or raise fees.

"I don't make a profit if I don't steal my customers assets" isn't a valid business plan.

Re: Crypto exchange AAX suspends withdrawals

#125

Post by giaour »

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 also function like banks (holding customer deposits, making loans/investments with customer funds), just without reserve requirements or FDIC insurance. The protections against bank runs that we have in place in TradFi are largely lacking in crypto, and the whole sector seems to have reached 1929 in its speed run of modern economic history.

Re: Crypto exchange AAX suspends withdrawals

#126

Post by nwah1 »

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…

Most of them are committing massive fraud. Gambling with customer funds. Misreporting trading volume via wash trading, and using that to create false impressions in the market that they can trade on. For instsnce, using their own tokens or "stablecoins" and then juicing the numbers for those.

Re: Crypto exchange AAX suspends withdrawals

#127

Post by djbebs »

jakelazaroff wrote: post #66
djbebs wrote: post #24

Earlier quoted context omitted.

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.

They shouldn't be, just like a pumpkin exchange shouldn't be trading using pumpkins that don't belong to them (or at all).

That's where the crime comes in.

Re: Crypto exchange AAX suspends withdrawals

#129

Post by nanna »

kkielhofner wrote: post #106
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…

As I've noted before on HN the entire concept of people being able to manage their own wallets flies against everything we know about people. People forget stuff, make mistakes, and lose things. The margin of error for a wallet is tiny. It's not rare for crypto forums, twitter, etc to prescribe completely ridiculous processes and systems for securing wallets, backing up seed phrases, etc. There's an entire cottage in…

> As I've noted before on HN

One of the joys of HN is that on the whole no one knows who anyone else really is nor keeps track of what they've argued previously.

Re: Crypto exchange AAX suspends withdrawals

#130

Post by EMM_386 »

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.

If they are going to make stuff up at least make it half-believable.
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