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Crypto exchange AAX suspends withdrawals

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Re: Crypto exchange AAX suspends withdrawals

#721

Post by sweetbitter »

amalcon wrote: post #699
sweetbitter wrote: post #661

Earlier quoted context omitted.

> The entire purpose of cryptocurrencies are to avoid those things, so while you technically could have them with a cryptocurrency, you would end up with no good reason to have a cryptocurrency at all. I will substitute a word from your post that will help you understand this easier: "The entire purpose of cash is to avoid those things, so while you technically could have them with cash, you would end up with no good…

This sort of rhetoric is suboptimal. It only seems persuasive because you consider cryptocurrency to be analogous in purpose to cash, but the person you're trying to convince likely does not believe this. If they did, then they likely would already see purposes of cryptocurrency other than avoiding regulation, via the analogy. If you're going to argue through analogy, you ideally need to ensure agreement with the ana…

Thanks for the advice. I use synchronous media like chat protocols much more often, and was blind to this- and yep, it does seem like the primary objection to that argument was born out of a flawed understanding of the analogy.

Re: Crypto exchange AAX suspends withdrawals

#722

Post by digianarchist »

pjc50 wrote: post #184
smcl wrote: post #158

Earlier quoted context omitted.

Re point #2 - this is one of the crazy things for me. When you work in finance, in the UK at least, you get it drilled into your head what "client money" is, what that implies, what you can do with it, and notably you get reminded during any training session the size of the fines that get imposed on people who fuck with client money. So to me it suggests that they simply don't employ anyone with any experience in ban…

Well, yes, it was a startup by a bunch of twentysomethings with no real banking experience. There was no partitioning. > the size of the fines that get imposed on people who fuck with client money. This is crypto, law doesn't apply here. Well, that's the marketing pitch at least. So far a lot of exchanges and such like have gone bankrupt or been blatently stolen by their operators and nowhere near enough people have…

3.5 years at Jane Street Capital. No excuse really...

Re: Crypto exchange AAX suspends withdrawals

#723

Post by cortesoft »

sweetbitter wrote: post #661
cortesoft wrote: post #534

Earlier quoted context omitted.

> While there's nothing intrinsic about cryptocurrency that would make it more prone to fraud than anything else There are absolutely intrinsic things that make cryptocurrency more prone to fraud. The inability to reverse transactions, quasi-anonymity, and lack of any central authority to resolve disputes. To limit fraud to the levels you see in traditional finance, you would need the regulations and oversight by cen…

> The entire purpose of cryptocurrencies are to avoid those things, so while you technically could have them with a cryptocurrency, you would end up with no good reason to have a cryptocurrency at all. I will substitute a word from your post that will help you understand this easier: "The entire purpose of cash is to avoid those things, so while you technically could have them with cash, you would end up with no good…

The entire purpose of cash is NOT to avoid a central authority... in fact, all cash has a central authority in the form of the government who issues the currency.

Re: Crypto exchange AAX suspends withdrawals

#724

Post by sweetbitter »

0xAFFFF wrote: post #447
narrator wrote: post #352

Earlier quoted context omitted.

You obviously haven't heard of the lightning network.

If your comment is a joke, nice one. If not, yes I have heard about it and it's unreliable, doesn't scale and is nowhere near close to make Bitcoin "digital cash", but nice try.

Well, what about Monero? That has low fees and is pretty reliable and private.

Re: Crypto exchange AAX suspends withdrawals

#725

Post by freejazz »

wizeman wrote: post #712
freejazz wrote: post #698

Earlier quoted context omitted.

Yet, not a legal position. If it wasn't your coins, SBF taking them to do whatever he wanted with them would not be illegal.

The point is that the holder(s) of the cryptographic keys is the only one(s) that can effectively manage (and transfer) the coins on the blockchain. When you transfer the coins to a crypto exchange, the exchange becomes the holder of the keys and therefore you run into the risk of the crypto exchange mismanaging the coins, getting hacked, losing them, etc. This can't happen if you securely hold the keys yourself (wit…

Thanks for explaining something to me that I did not require explanation of

Re: Crypto exchange AAX suspends withdrawals

#726

Post by dragontamer »

dibt wrote: post #660
dragontamer wrote: post #647

Earlier quoted context omitted.

> It is not a loan! So lets say I own 10 ETH. Explain to me how I get my staking rewards. Because step #1 involves me transferring that ETH to Coinbase (or some other entity with a large enough ETH basis to serve as a trusted staking entity). That is a loan. I don't own ETH anymore, I gave it to Coinbase. Coinbase creates an "IOU", saying "I promise that dragontamer will get his 10 ETH back", through some system of t…

> I don't own ETH anymore, I gave it to Coinbase. You DO own the ETH. Regardless of whether you are staking it yourself, or have given it to Coinbase to stake. Similar to how you maintain ownership of your rental property even if you allow a property management company to run it. This is true if you move your ETH from a self-custody wallet to coinbase (custodial wallet). Either way, you maintain ownership. The tokens…

> You DO own the ETH.

Personal wallets cannot participate in ETH staking and you know it. The first step is to transfer your ETH to a large scale, trusted wallet, like Coinbase's wallet.

What you own is an IOU from Coinbase saying they owe you the ETH at a future date. The value of this IOU is taxable of course. But the important thing is that if Coinbase goes bankrupt, it is an unsecured IOU / bond that is junior to Coinbase's other creditors.

-----

Just like how depositors into Celsius "owned" IOUs saying they had BTC or ETH or USDC in Celsius... it turns out that the value of those IOUs is worthless as the bankruptcy proceedings carried forward. Customer deposits, in the USA, are junior to investment banker's bonds that funded the business to begin with.

Re: Crypto exchange AAX suspends withdrawals

#727

Post by colechristensen »

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…

>If this is true, how does it get fixed?

It's not true, they're just dipping into customer funds to make risky bets on extremely volatile instruments (more crypto assets) and losing. Along with straight up fraud stealing customer funds and having shit security and getting robbed.

It gets "fixed" by regulatory bodies like the SEC appropriately and quickly requiring a set of rules and regulations on any exchange that operates in country along with auditing, fines, and general fast and effective enforcement.

These exchanges aren't failing because of accidents or inherent risk, they're committing fraud and taking foolish risks that traditional banks aren't allowed to take.

Re: Crypto exchange AAX suspends withdrawals

#728

Post by wizeman »

freejazz wrote: post #725
wizeman wrote: post #712

Earlier quoted context omitted.

The point is that the holder(s) of the cryptographic keys is the only one(s) that can effectively manage (and transfer) the coins on the blockchain. When you transfer the coins to a crypto exchange, the exchange becomes the holder of the keys and therefore you run into the risk of the crypto exchange mismanaging the coins, getting hacked, losing them, etc. This can't happen if you securely hold the keys yourself (wit…

Thanks for explaining something to me that I did not require explanation of

> Thanks for explaining something to me that I did not require explanation of

It didn't seem like you understood the value of the expression "not your keys, not your coins", because you argued for the legal position, which implied that the legal position was more significant and that holding the keys didn't have as much value (even though it's the only one that actually ensures that you don't lose the coins).

Another interpretation is that you understood "not your keys, not your coins" literally, because you said (paraphrasing) "no, in fact they are your coins, otherwise stealing them wouldn't be illegal". Which implies that you did not understand the meaning and utility of the expression.

So maybe I misinterpreted you, or maybe you didn't express yourself as well as you think you did.

Either way, you're welcome.

Re: Crypto exchange AAX suspends withdrawals

#729

Post by cma »

SuoDuanDao wrote: post #604
oblio wrote: post #229

Earlier quoted context omitted.

> 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???

it's superior in terms of not having the trusted third party that facilitates your trade make off with your money, as is happening in these self-described exchanges right now . Keeping a trusted third-party in the loop is always cheaper than automating that function using a blockchain, unless the risk is factored in.

The risk of misplacing your keys/passphrase or getting hacked with it in plaintext on your computer may be higher across the end-user population.

Re: Crypto exchange AAX suspends withdrawals

#730

Post by dibt »

dragontamer wrote: post #726
dibt wrote: post #660

Earlier quoted context omitted.

> I don't own ETH anymore, I gave it to Coinbase. You DO own the ETH. Regardless of whether you are staking it yourself, or have given it to Coinbase to stake. Similar to how you maintain ownership of your rental property even if you allow a property management company to run it. This is true if you move your ETH from a self-custody wallet to coinbase (custodial wallet). Either way, you maintain ownership. The tokens…

> You DO own the ETH. Personal wallets cannot participate in ETH staking and you know it. The first step is to transfer your ETH to a large scale, trusted wallet, like Coinbase's wallet. What you own is an IOU from Coinbase saying they owe you the ETH at a future date. The value of this IOU is taxable of course. But the important thing is that if Coinbase goes bankrupt, it is an unsecured IOU / bond that is junior to…

> The first step is to transfer your ETH to a large scale, trusted wallet, like Coinbase's wallet.

Absolutely FALSE. I don't know how you could possibly be so confidently wrong. One of the big selling points of PoS is that you don't need mining facility/hardware. You only need 32 ETH, and the resources to run the node. NO central entity is required.

From: https://ethereum.org/en/staking/#how-to-stake-your-eth

"Solo staking on Ethereum is the gold standard for staking. It provides full participation rewards, improves the decentralization of the network, and never requires trusting anyone else with your funds."

Even if you move it to Coinbase for them to do the staking, the custodial wallet is in your name. The same happens with ETH held for trading. You can move it from one exchange to another, and still not trigger a taxable event as long as you own both accounts/wallets.

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