Binance temporarily suspends USDC withdrawals • Hacker News Board

Re: Binance temporarily suspends USDC withdrawals

#61

Post by joyfylbanana » Tue, Dec 13, 2022, 10:37 AM UTC

SilverBirch wrote: post #40

plsbenice34 wrote: post #33

Earlier quoted context omitted.

Nobody with basic knowledge in this area would think of USDC as "highly decentralized censorship proof freedom coin". It is centralised and pegged to USD so obviously it must be intentionally interlinked with the banking system.

This is the fiction of Crypto though - we're all here in this space because we want decentralized censorship-proof, public recorded transactions, and we then proceed to immediately abandon all of those principles to trade dollar denominated assets on a central exchange that operates out of a shady jurisdiction. Yes, we all know what the point of crypto was. Yes we all know what is actually happening, the only questio…

> we're all here in this space because we want decentralized censorship-proof, public recorded transactions

dude what. no. the majority of people are "here" just wanting the numbers go up in the closed-source centralized database that their trusted banker runs.

there are small group of people that actually care about decentralization and open source access to money, that number is maybe 0,01% of the total "crypto" users.

Re: Binance temporarily suspends USDC withdrawals

#62

Post by Galanwe » Tue, Dec 13, 2022, 10:39 AM UTC

SilverBirch wrote: post #40

plsbenice34 wrote: post #33

Earlier quoted context omitted.

Nobody with basic knowledge in this area would think of USDC as "highly decentralized censorship proof freedom coin". It is centralised and pegged to USD so obviously it must be intentionally interlinked with the banking system.

This is the fiction of Crypto though - we're all here in this space because we want decentralized censorship-proof, public recorded transactions, and we then proceed to immediately abandon all of those principles to trade dollar denominated assets on a central exchange that operates out of a shady jurisdiction. Yes, we all know what the point of crypto was. Yes we all know what is actually happening, the only questio…

Because blockchain make sense, even though 90% of the projects using them are scams and get rich quick schemes.

If liquidity was available without ridiculous yields promised to lenders, we wouldn't need those centralized exchanges.

The sole reason people are trading on Binance is because of the 3bps transaction fee, versus 30bps on decentralized exchanges.

Re: Binance temporarily suspends USDC withdrawals

#63

Post by hef19898 » Tue, Dec 13, 2022, 10:39 AM UTC

Galanwe wrote: post #56

janmo wrote: post #37

Earlier quoted context omitted.

It is not reasonable at all. It means that: 1. They are not prepared at all for a "bank run" 2. USDC on the exchange are not backed by real USDC. Therefor they need to market buy them. 3. CZ is telling people to withdraw using BUSD and USDT, both more or less Binance controlled stables that are much harder to convert into real USD. It would be extremely wise to exit Binance and Binance related coins such as BNB, BUSD…

> They are not prepared at all for a "bank run" Nobody is prepared for a bank run, that would be idiotic. It would mean storing strictly only liquid assets. > USDC on the exchange are not backed by real USDC. Therefor they need to market buy them. That's pure speculation on your side... Withdrawal pauses have happened many times in the past, it's not really alarming. Only when something bad happens afterward do peopl…

Banks are, up to whatever the legally guaranteed deposit insurance is, prepared for bank runs. And I never heard of actual banks limiting or even pausing withdrawls, non-cash, ever. And those cases where they do, e.g. Libanon, are a dead give away the economy is fucked. So, drawing from that parallel, the crypto economy might very well be fucked.

Re: Binance temporarily suspends USDC withdrawals

#64

Post by [deleted] » Tue, Dec 13, 2022, 10:40 AM UTC

janmo wrote: post #37

sho wrote: post #30

The quotes around "temporarily" are editorialising, IMO. They should be removed. No fan of Binance but it's a reasonable explanation and submitter has given no reason to think it is not, indeed, a temporary situation, as has happened many times in the past without particular note.

It is not reasonable at all. It means that: 1. They are not prepared at all for a "bank run" 2. USDC on the exchange are not backed by real USDC. Therefor they need to market buy them. 3. CZ is telling people to withdraw using BUSD and USDT, both more or less Binance controlled stables that are much harder to convert into real USD. It would be extremely wise to exit Binance and Binance related coins such as BNB, BUSD…

[deleted]

Re: Binance temporarily suspends USDC withdrawals

#65

Post by flumpcakes » Tue, Dec 13, 2022, 10:41 AM UTC

Galanwe wrote: post #56

janmo wrote: post #37

Earlier quoted context omitted.

It is not reasonable at all. It means that: 1. They are not prepared at all for a "bank run" 2. USDC on the exchange are not backed by real USDC. Therefor they need to market buy them. 3. CZ is telling people to withdraw using BUSD and USDT, both more or less Binance controlled stables that are much harder to convert into real USD. It would be extremely wise to exit Binance and Binance related coins such as BNB, BUSD…

> They are not prepared at all for a "bank run" Nobody is prepared for a bank run, that would be idiotic. It would mean storing strictly only liquid assets. > USDC on the exchange are not backed by real USDC. Therefor they need to market buy them. That's pure speculation on your side... Withdrawal pauses have happened many times in the past, it's not really alarming. Only when something bad happens afterward do peopl…

> Nobody is prepared for a bank run

It's an exchange. Your money should be 100% liquid. Everyone should be prepared for a bank run. Unless they're just as dodgy as FTX and using everyone else's money for shenanigans.

I don't know why people are defending this as if it is a good thing.

Re: Binance temporarily suspends USDC withdrawals

#66

Post by cypress66 » Tue, Dec 13, 2022, 10:41 AM UTC

mikelovenotwar wrote: post #51

andrewinardeer wrote: post #39

Earlier quoted context omitted.

Maybe, maybe not. But your comment comes off as mean spirited. People will lose a lot of their hard earned money if that happens. Sometimes people's empathy doesn't travel past their own personal horizon which seems to be the case with your comment.

I wish for large international ponzi schemes to cease to be, preventing further influx from people who don't know better. For those already in the ponzi scheme there's little that can be done to convince them they're in a ponzi scheme, or cult. People lose their money on many things, hard earned or otherwise, regardless wishing that avenues which are designed to facilitate such losses cease to exist is not mean spiri…

Your entire comment hinges on the idea that Binance is a scam, which nobody knows for a fact.

And I would hope binance is not a scam, so people don't lose their money.

Re: Binance temporarily suspends USDC withdrawals

#67

Post by everfree » Tue, Dec 13, 2022, 10:41 AM UTC

janmo wrote: post #37

sho wrote: post #30

The quotes around "temporarily" are editorialising, IMO. They should be removed. No fan of Binance but it's a reasonable explanation and submitter has given no reason to think it is not, indeed, a temporary situation, as has happened many times in the past without particular note.

It is not reasonable at all. It means that: 1. They are not prepared at all for a "bank run" 2. USDC on the exchange are not backed by real USDC. Therefor they need to market buy them. 3. CZ is telling people to withdraw using BUSD and USDT, both more or less Binance controlled stables that are much harder to convert into real USD. It would be extremely wise to exit Binance and Binance related coins such as BNB, BUSD…

> USDC on the exchange are not backed by real USDC. Therefor they need to market buy them.

Likely, USDC balances are backed by dollars in the bank account mentioned in the tweet. To convert that to USDC, they don't need to market buy it - they can wire it to Circle to get fresh USDC minted. In contrast with having all USDC always on hand (like they probably should), this lets Binance earn interest from the bank for their customer deposits.

Or they could be insolvent, sure. There's really no way to reliably tell.

Re: Binance temporarily suspends USDC withdrawals

#68

Post by ivanmontillam » Tue, Dec 13, 2022, 10:42 AM UTC

unsigner wrote: post #58

jacquesm wrote: post #43

Earlier quoted context omitted.

The government isn't 'meddling' with Binance, Binance is under the spotlight because it appears that keeping reserves is a bit of a weak point with all of these new finance companies. If anything you should be grateful that there (finally) is some oversight, but I fear it is too little and too late.

My Argentinian friends tend to view everything that happens in Argentina as part of either some nefarious plot by the US government, or the glorious struggle of the brave Argentinian people against the US government. They would certainly view anything that happens with Binance, or even FTX/SBF as the US government trying to screw them over.

I try not to be like that, but sometimes it appears like so.

Most of the time it's truly hard to see any alternative explanation, and I invest a lot to have the most nurtured worldview possible, with all the points of view considered. And even then, it's really hard to think in plausible alternative explanations that do not feel like pulling hair out of the head.

It's like duck typing: walks like a duck, quacks like a duck, has duck legs. It must be a duck.

Re: Binance temporarily suspends USDC withdrawals

#69

Post by plsbenice34 » Tue, Dec 13, 2022, 10:42 AM UTC

SilverBirch wrote: post #40

plsbenice34 wrote: post #33

Earlier quoted context omitted.

Nobody with basic knowledge in this area would think of USDC as "highly decentralized censorship proof freedom coin". It is centralised and pegged to USD so obviously it must be intentionally interlinked with the banking system.

This is the fiction of Crypto though - we're all here in this space because we want decentralized censorship-proof, public recorded transactions, and we then proceed to immediately abandon all of those principles to trade dollar denominated assets on a central exchange that operates out of a shady jurisdiction. Yes, we all know what the point of crypto was. Yes we all know what is actually happening, the only questio…

People need to manage risk, buy food and pay rent regardless of their conviction in those principles. However, the traditional financial system is broken or malicious and not serving crypto users properly. It is too difficult and slow to cash out to bank accounts. I know some people in developing countries for whom it is simply not an option to withdraw to their bank account, and their nationality precludes them from most offshore options. It can be essentially the same situation in developed countries. It's not a clear question whether it's best to take the risk of a stablecoin collapsing or take the risk of the price volatility of more decentralised coins, but they don't have many other options.

Re: Binance temporarily suspends USDC withdrawals

#70

Post by Galanwe » Tue, Dec 13, 2022, 10:43 AM UTC

flumpcakes wrote: post #65

Galanwe wrote: post #56

Earlier quoted context omitted.

> They are not prepared at all for a "bank run" Nobody is prepared for a bank run, that would be idiotic. It would mean storing strictly only liquid assets. > USDC on the exchange are not backed by real USDC. Therefor they need to market buy them. That's pure speculation on your side... Withdrawal pauses have happened many times in the past, it's not really alarming. Only when something bad happens afterward do peopl…

> Nobody is prepared for a bank run It's an exchange. Your money should be 100% liquid. Everyone should be prepared for a bank run. Unless they're just as dodgy as FTX and using everyone else's money for shenanigans. I don't know why people are defending this as if it is a good thing.

Sorry but no.

No single broker on the planet is instantly liquid. At the very best daily liquid.

Most currency settlements are between 1 and 3 days for DM. Your "feeling" of instantaneous transfers is just front office display, the real back office takes days.