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Binance is trying to calm investors, but its finances remain a mystery

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101–110 of 280 posts

Re: Binance is trying to calm investors, but its finances remain a mystery

#101
post #5

Even if Binance is 100% solvent, big crypto money needs to be stored with multisig between multiple companies. I advise everyone to use casa hodl for storing btc and eth if they are afraid of doing it themselves.

Everyone seems to unison on keeping it off any exchange or any other unregulated scam. If Casa Hodl goes with your money you almost deserve it

https://keys.casa/

What do you mean?

A friend was asking me what should a friend of him do with a significant amount of BTC/ETH (tens of millions of dollars), as the owner died and there are 3 children who need to get it when they get 18.

Lawyers are not capable of handling that much money without professional help, so I adviced them to go to a place when they help them with the self custody step by step with open source software.

Re: Binance is trying to calm investors, but its finances remain a mystery

#102
One thing to be aware of with Binance. As far as I understand, most of the transactions occur on their own ethereum-compatible-but-not-quite-ethereum chain called the "Binance Smart Chain". While having these sidechains can improve scalability and reduce costs (they are just another form of sharding), this presumably introduces an additional point of potential failure compared with regular centralised exchanges: not only can the exchange fail to honour withdrawals, but the bridge between the chains could also fail to honour transfers out from the Binance smart chain back to the ethereum mainnet.

There is also an additional potential point of misaccounting/fraud and also theft. What's supposed to happen with bridges is say I want to move some token from the mainnet to BSC, I send the token to the bridge on mainnet and it issues me the token on the BSC side. However, mainnet doesn't know anything about the existance of BSC so the token on the mainnet side still exists and is still a valid token on the mainnet. Likewise when I move stuff from BSC to mainnet the same thing happens - a residual token is created out of thin air on the side which the "real" asset is leaving. Now good actors should burn this token (move it to an address that noone has the private key to so it is put permanently beyond use) to make it go away but there is a lot of temptation to not do this because if you mess up or something otherwise goes wrong there is no going back. You can't "unburn" things. So rather than burning, people often put stuff into a special holding address and sort of triple pixie promise they won't double-spend it. This can also help legitimately reduce cost because next time you need to create the token on this side of the bridge you can instead take one out of this store and use that instead. You can see the problem presumably? If someone bad (either internally or via a hack) gets access to the keys to this address their motives might not be pure and suddenly they have a large amount of seemingly valid assets they can just take. This is part of what happened with the "Ronin" hack of Axie Infinity - they managed to phish a private key of the bridge and steal assets that had been bridged between networks. https://edition.cnn.com/2022/03/29/tech/axie-infinity-ronin-...

Re: Binance is trying to calm investors, but its finances remain a mystery

#103
post #89
post #82

If Binance is insolvent(which looks like the popular sentiment here), could it be possible that they're playing an angle to "fix" the solvency given enough time delay? Or does their insolvency practically guarantee that they will never be solvent again? Obviously the answer depends on the amount of financial trouble they're in, or whether they're in trouble at all. I'm not sure about anything else though.

I'd bet on Binance just delaying the inevitable collapse, rather than trying to fix the underlying issues. Judging from the FTX balance sheet, they gambled all of their money on shitcoins and random projects without any sense of logic. No amount of fixing would have helped, other than an magical perpetual bull market. Odds are Binance is also fundamentally screwed.

IF they never gambled their depositors money, then they are/will be fine.

Running an exchange, taking a cut of all transactions on your platform is effectively impossible to collapse (excluding your actual costs of doing business).

Re: Binance is trying to calm investors, but its finances remain a mystery

#104

From TFA: > The reserve report, released Wednesday, is a five-page letter from a partner at the South African affiliate of the global accounting firm Mazars. It contained three numbers. The letter wasn’t an audit report, didn’t address the effectiveness of the company’s internal financial-reporting controls, and said Mazars did “not express an opinion or an assurance conclusion,” meaning it wasn’t vouching for the nu…

That's pretty much it

They're asking the auditors to tell how many sweets you have in a box, but you can only shake the box and listen to what sound it makes. And not actually do any form of due diligence

Re: Binance is trying to calm investors, but its finances remain a mystery

#105

Earlier quoted context omitted.

I just can't see how crypto can recover tbh. What other technology spent ten years, produced basically nothing of value, is almost universally hated by the whole population and then came back to be something useful? It's not like quantum computing where we just don't know how to make it work. There are close to no technical problems, the core idea just doesn't work.

Imagine thinking an industry worth $800B, with 200M users, transferring billions of dollars a day, is "hated by the whole population". You really live in a bubble

Imagine thinking an industry worth $0.00 is worth $800B. You really live in a bubble

Re: Binance is trying to calm investors, but its finances remain a mystery

#106

Binance was partly responsible (rightly or not) for triggering FTXs collapse. Edit: Triggered, not caused. He controlled the timing. Doing so without having their own house in order would be suicidal. I'm not saying they are safe. Just that CZ is either much happier he can deal with a "bank run" or crazy. Does anyone know why it is so difficult for companies to provide audits? It seems like it SHOULD be very doable f…

Terrible that they FORCED FTX to gamble with customer funds, lie about it and then get caught. HOW DARE THEY!!!!

Re: Binance is trying to calm investors, but its finances remain a mystery

#107

Binance was partly responsible (rightly or not) for triggering FTXs collapse. Edit: Triggered, not caused. He controlled the timing. Doing so without having their own house in order would be suicidal. I'm not saying they are safe. Just that CZ is either much happier he can deal with a "bank run" or crazy. Does anyone know why it is so difficult for companies to provide audits? It seems like it SHOULD be very doable f…

Terrible that they FORCED FTX to gamble with customer funds, lie about it and then get caught. HOW DARE THEY!!!!

That's not what I said...

Re: Binance is trying to calm investors, but its finances remain a mystery

#108

Binance is the closest thing to a global, borderless bank that exists today. They exist everywhere and nowhere. Their legal entities shift based on what is needed at the moment. They have the ability to easily create tens of millions of dollars as needed based on their BNB reserves, tight relationship with Tether, their ability to launch new token projects (i.e. unregulated securities offerings), and their stablecoin…

> know a prominent crypto entrepreneur that got loaned 8 figures after a text message to help finance an acquisition

I work in finance and can guarantee you that I wouldn't touch such a "bank" with a 50 foot pole while wearing a hazmat suit.

Let's just say that their "risk management" doesn't seem up to scratch if what you're claiming is true.

Re: Binance is trying to calm investors, but its finances remain a mystery

#109
post #82

If Binance is insolvent(which looks like the popular sentiment here), could it be possible that they're playing an angle to "fix" the solvency given enough time delay? Or does their insolvency practically guarantee that they will never be solvent again? Obviously the answer depends on the amount of financial trouble they're in, or whether they're in trouble at all. I'm not sure about anything else though.

History shows that this is always what happens, and history shows it always fails. But I think history must have an (anti)survivor bias here because if you do manage to move from insolvent to solvent I think that you don't ever tell anyone.

But... on the other hand maybe history is right and everyone who gets into this mess inevitably only makes it worse by struggling.

Re: Binance is trying to calm investors, but its finances remain a mystery

#110

Earlier quoted context omitted.

I just can't see how crypto can recover tbh. What other technology spent ten years, produced basically nothing of value, is almost universally hated by the whole population and then came back to be something useful? It's not like quantum computing where we just don't know how to make it work. There are close to no technical problems, the core idea just doesn't work.

Imagine thinking an industry worth $800B, with 200M users, transferring billions of dollars a day, is "hated by the whole population". You really live in a bubble

For those 200M I'd like to see an independent source before I believe it. Or are you trying to claim 1 wallet = 1 user or something?

When it comes to money moved: the top 1% in the US possess more wealth than the whole middle 60% of income distribution combined.

So if you believe that moving a lot of money inherently implies broad adoption in the population you live in a very small bubble far away from reality.

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