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Crypto exchange AAX suspends withdrawals

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Re: Crypto exchange AAX suspends withdrawals

#221

Post by smileybarry »

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…

> There's an entire cottage industry built around people etching their seed phrases on steel plates for people to (I'm not kidding) bury them like they're gold in the 1800s.

I was stunned to see so many of these products on Amazon last time I searched for smartcard stuff. On that note, I hate that you can't search for smartcard products anymore without 80% of your results being crypto wallets.

Re: Crypto exchange AAX suspends withdrawals

#222

Post by Nifty3929 »

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…

You have to look at the business model of the exchange. They way you describe it is how it SHOULD work. The exchange makes money directly from you through transaction fees or just account fees. They would not need to "invest" your crypto in anything, because they have other ways to make money. This is (I think) the way Binance and Coinbase operate.

But a lot of these exchanges have attracted customers by offering interest (rather than charging a fee) and/or free transactions. But then how can the exchange make money and keep the lights on? Well they have to "invest" the customer's money. Then the investments go bad and it all blows up.

Re: Crypto exchange AAX suspends withdrawals

#223

Post by oblio »

MichaelCollins wrote: post #188
tootie wrote: post #175

Earlier quoted context omitted.

People look at all the market failures and declare the system is broken. Crypto is here to show us all the market failures that didn't happen.

That's the way I see it. Anarcho-libertrian cryptobros who think government regulation is a net negative are like people who don't wear seat belts because they know somebody who died in a crash despite wearing one. It is true that sometimes these safety measures don't prevent the bad thing from happening, but if you focus on those cases then you miss all the times it did work.

Basic statistics, really.

Nothing is yes/no. Everything is maybe/maybe not. We're just moving the needle towards maybe or towards maybe not.

A seat belt moves the needle a lot in the "maybe not" section for the "dying in a car crash" category.

Government regulation is mixed but guess what, the empirical evidence shows it works. How do we know that? What do we call countries with crap, weak and abused regulation? Failed states.

Re: Crypto exchange AAX suspends withdrawals

#224

Post by bogomipz »

I found it difficult to parse this sentence and not think this is maybe one of the worst euphemisms in public relations I have seen:

>"Due to the failure of our third-party partner, some users' balance data were found abnormally recorded in our system."

Re: Crypto exchange AAX suspends withdrawals

#225

Post by gitfan86 »

jacknews wrote: post #161
gitfan86 wrote: post #138

Earlier quoted context omitted.

But the WHOLE point of crypto was to avoid governmental control. If the government is regulating it that means they can control it. And it becomes completely worthless. If you want digital gold as an inflation hedge you can literally buy a GLD ETF. It gives you digital shares in actual GOLD.

There's nothing to stop people using crypto to buy/sell goods directly, or to trade directly between themselves, completely outside of government control. And crypto itself can't be inflated away, or obsoleted, or otherwise really controlled by government, except by attacking it; making it illegal to own or trade, to operate nodes, to write code, or use CIA shenanigans, etc. But if an exchange claims that they hold y…

Vendors of goods and services have virtually no interest in self custody. They want deposits going to a bank/exchange. So you are not going to be able to buy many goods or services directly. How many businesses are CASH only today? That is best case scenario for buy/sell crypto directly.

Re: Crypto exchange AAX suspends withdrawals

#226

Post by ethanbond »

netheril96 wrote: post #191
gzer0 wrote: post #119

"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."

Centralized exchanges are the polar opposite of what Satoshi was advocating for.

Thinking that competitive advantages will not accrue to centralized entities may as well be the very definition of wishful thinking.

Re: Crypto exchange AAX suspends withdrawals

#227

Post by bilbo0s »

jwitthuhn wrote: post #62
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)"

This will be a hard lesson but a good lesson for a lot of people.

To be honest, crypto doesn't even need exchanges. Some even have smart contract capability that can explicitly outline the terms and conditions of any single trade. An exchange is superfluous. So as soon as you see people going to an exchange en masse, to trade assets with smart contracts on them, you know something is out of place.

Re: Crypto exchange AAX suspends withdrawals

#228

Post by acomms »

djbebs wrote: post #152
acomms wrote: post #61

Earlier quoted context omitted.

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

No regulation would have prevented this crime from happening. I want to be clear here, what happened here is already illegal as is, and no regulation would have prevented it from happening in the first place. Hell, the firm was already being audited, and those auditors didn't catch the accounting discrepancies, so it's doubtful that any additional regulation would have found this earlier either...

You aren't wrong, maybe it's my wishful thinking. What do you think the solution is here? Do you think the house of cards stayed propped up because a lot of people were in on the fraud? Were the auditors just incompetent or were they in on it? Auditors are reasonably well known firms.

Re: Crypto exchange AAX suspends withdrawals

#229

Post by oblio »

charcircuit wrote: post #198
kinnth wrote: post #149

Earlier quoted context omitted.

Defi is not this. In defi exchanges you place your coins into a smart contract or have them always on your account. If anything a crypto exchange is a misnomer as it's not even needed. The only reason it exists is because smart contracts didn't exist when they first started.

>The only reason it exists is because smart contracts didn't exist when they first started. Calm down. That is not true. Smart contract based exchanges do not let people exchange real money into crypto. There will always need to be offchain exchanges for trading USD for crypto. Additionally, trading off chain is much cheaper than on chain. Centralized exchanges will always exist because people want on / off ramps, pe…

> Additionally, trading off chain is much cheaper than on chain.

How this does not wake up all the idiots, I will never understand.

How come your superior technology is inferior in one of the crucial axes of trading technology???

Re: Crypto exchange AAX suspends withdrawals

#230

Post by koheripbal »

rtkwe wrote: post #212
netheril96 wrote: post #191

Earlier quoted context omitted.

Centralized exchanges are the polar opposite of what Satoshi was advocating for.

Exchanges are the primary reason crypto value is as high as it is though. Without the easy way to get money in (and usually out) of $COINs there's less speculation, less money flowing in, less market to drive prices. If we were back in the days of Local Bitcoin being the best way to buy coins there'd be even less of the meager adoption we've seen in business too.

Satoshi also never said Bitcoin should have a high value or be an investment vehicle.
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