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Binance freezes withdrawals of stablecoin USDC as investors pull $2B

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Re: Binance freezes withdrawals of stablecoin USDC as investors pull $2B

#261

Post by nibbleshifter »

matthewdgreen wrote: post #196
atarashi wrote: post #189

Earlier quoted context omitted.

Let me add: Only BUSD on Ethereum (ERC-20) is issued by Paxos. The BUSD on the BNB Chain (BEP-20) is not affiliated with Paxos and not regulated by NYDFS. Quoting Paxos: "BUSD is issued by Paxos on the Ethereum blockchain and regulated by the New York Department of Financial Services. Separately, Binance wraps BUSD and issues separate tokens (known as Binance-Peg BUSD) on several blockchains, including BNB Smart Chai…

Yes, but I believe that this "wrapping" should be visible on chain. In the sense that there should be a 1:1 mapping between "real" BUSD locked on Ethereum and the number of pegged BUSD on other chains, and that the accounting can be verified in real time. But I haven't verified.

> But I haven't verified.

Offhand, I can't think of a fast and easy way to verify this reliably.

Re: Binance freezes withdrawals of stablecoin USDC as investors pull $2B

#262

Post by wmf »

kikokikokiko wrote: post #169
wmf wrote: post #148

Earlier quoted context omitted.

So let's imagine that Binance has $4B of USD customer liabilities backed by $2B of USDC and $2B of BUSD. Fully solvent and fully liquid. Then customers try to withdraw $3B of USDC which Binance does not have. Binance would be happy to give you BUSD but for whatever reason customers specifically want USDC. (I am absolutely convinced that Binance is evil but this specific situation does not appear particularly bad.)

So, they need to find gullible 3rd parties that accept to give them hard cash (USD) in exchange for their in house created clown money (BUSD), and then use this hard cash to go to the market and buy USDC. How is this different from FTX padding their balance sheet with billions of their own made up clown money? Crypto is ponzies all the way down.

BUSD is not clown money; it's pretty tightly regulated by the state of New York.

It looks like Binance just redeemed $700M of BUSD, presumably to convert it to USDC. https://twitter.com/whale_alert/status/1602741130394845185

Re: Binance freezes withdrawals of stablecoin USDC as investors pull $2B

#263

Post by nibbleshifter »

vkou wrote: post #139
fallingknife wrote: post #88

Earlier quoted context omitted.

Not your key, not your crypto.

This seems like a major bug with crypto. I don't have physical possession of my bed when I get up from it and go to work, but I've yet to come home and discover a grifter, or conman sleeping in it. Likewise, if I lose my car keys, society still manages to acknowledge that I am still the owner of my car.

There's a variety of "social recovery mechanisms" being worked on in ETH land, at least.

Re: Binance freezes withdrawals of stablecoin USDC as investors pull $2B

#264

Post by nibbleshifter »

gamblor956 wrote: post #133
bellip wrote: post #94

Earlier quoted context omitted.

Yes, it's digital already. However banks manage the whole system and they can do whatever they want with your money if you are nobody. I have been waiting for 2 and a half months for an international payment via SWIFT, I worked long hours for that money and I needed it urgently. The money left the sender's account 2 and a half months ago. Neither of us has the money in our accounts while the bank tells us to just wai…

SWIFT does not take 2 months; it takes minutes or hours. Your bank already has your money or it never received it. More likely, they are holding your money due to some issues with your local KYC laws. (This is especially likely in South America, where foreign senders must verify the source and purpose of payments made to local residents.)

Sometimes wire transfers mysteriously fail for no reason, in particular between US and EU banks.

I've had this issue with being paid before, nobody could tell me why the transaction would mysteriously fail.

Re: Binance freezes withdrawals of stablecoin USDC as investors pull $2B

#265

Post by nibbleshifter »

trotro wrote: post #227
Octokiddie wrote: post #22

> The world's biggest crypto exchange will freeze all withdrawals of USD Coin while it conducts a "token swap" to boost its holdings of the dollar-pegged cryptocurrency, the crypto group's CEO Changpeng Zhao said Tuesday It's worth noting that USDC is not even a token controlled by Binance. It's controlled and issued by Circle. So effectively, Binance is refusing to honor its commitment to depositors to give them the…

> You "need" a stable coin because you're trying to have your cake and eat it too: US dollar-like liquidity and value preservation without US dollar financial regulation. What about transferring value anonymously? Apart from cash and stable coins, every way of transferring stable assets (wire transfer, Venmo, WU,...) requires a copious amount of KYC and hence a complete loss of privacy (as well as serious security ri…

> essentially advocating for the end of any sort of financial privacy.

See the recent thread about cash transaction limits in the EU, an awful lot of HN users celebrating further restrictions that limit/erode financial privacy.

Re: Binance freezes withdrawals of stablecoin USDC as investors pull $2B

#266

Post by kimixa »

xboxnolifes wrote: post #153
gamblor956 wrote: post #133

Earlier quoted context omitted.

SWIFT does not take 2 months; it takes minutes or hours. Your bank already has your money or it never received it. More likely, they are holding your money due to some issues with your local KYC laws. (This is especially likely in South America, where foreign senders must verify the source and purpose of payments made to local residents.)

Either way, they haven't received the money.

Yes, but the same issue will likely occur for any other large transfer of value, be it on the blockchain or a briefcase of cash or anything else. The wording of the regulations may not have caught up, but their intent is to regulate all wealth transfers.

Unless you're avoiding the regulation and just not reporting it, of course, which is likely illegal depending on the jurisdictions involved.

Re: Binance freezes withdrawals of stablecoin USDC as investors pull $2B

#267

Post by landemva »

hef19898 wrote: post #112
bellip wrote: post #94

Earlier quoted context omitted.

Yes, it's digital already. However banks manage the whole system and they can do whatever they want with your money if you are nobody. I have been waiting for 2 and a half months for an international payment via SWIFT, I worked long hours for that money and I needed it urgently. The money left the sender's account 2 and a half months ago. Neither of us has the money in our accounts while the bank tells us to just wai…

It seems FTX was perfectly able to do whatwver they wanted, through Alameda, with customer deposits as well. Banks on the other are much better regulated, and for very valid reasons as current events show.

Which bank provided the gateway for Alameda to send/receive from the legacy banking system? There may be some regulator questions for that bank's compliance team.

https://www.ledgerinsights.com/senators-quiz-silvergate-bank...

Re: Binance freezes withdrawals of stablecoin USDC as investors pull $2B

#268

Post by matthewdgreen »

nibbleshifter wrote: post #261
matthewdgreen wrote: post #196

Earlier quoted context omitted.

Yes, but I believe that this "wrapping" should be visible on chain. In the sense that there should be a 1:1 mapping between "real" BUSD locked on Ethereum and the number of pegged BUSD on other chains, and that the accounting can be verified in real time. But I haven't verified.

> But I haven't verified. Offhand, I can't think of a fast and easy way to verify this reliably.

I visited Binance's main page on BUSD [1] and it suggests you go look at their proof-of-reserves page [2], which lists the exact number of each token on Ethereum (5,334,500,000), BNB (5,315,999,056), Avalanche (11,500,000) and Polygon (6,000,000), each with links to block explorers. Note that if everything adds up, this total leaves 1,000,944 tokens on Ethereum, but at least that's positive.

Edit: I spent some time thinking the Ethereum number was the total number of BUSD, but apparently it is Binance's holdings which can be found in a wallet nicknamed "Binance: Binance-Peg Tokens" on Etherscan [3]. Since this number is greater than the total number of pegged tokens, I guess everything adds up. (Of course, since the "cross-chain peg" here is implemented in a centralized way by Binance, it could de-peg at any point they want it to.)

[1] https://www.binance.com/en/blog/ecosystem/understanding-busd... [2] https://www.binance.com/en/collateral-btokens [3] https://etherscan.io/address/0x47ac0fb4f2d84898e4d9e7b4dab3c...

Re: Binance freezes withdrawals of stablecoin USDC as investors pull $2B

#269

Post by dbancajas »

jscottmiller wrote: post #35
4pkjai wrote: post #16

This might be why BTC is shooting up at the moment. If you can't withdraw your stable coins you might as well buy Bitcoin and withdraw that.

This is exactly what happened at Mt Gox almost a decade ago.

except those BTCs are not real. They are just pretend BTC in your account. You have to send it to your wallet

Re: Binance freezes withdrawals of stablecoin USDC as investors pull $2B

#270

Post by fallingknife »

vkou wrote: post #139
fallingknife wrote: post #88

Earlier quoted context omitted.

Not your key, not your crypto.

This seems like a major bug with crypto. I don't have physical possession of my bed when I get up from it and go to work, but I've yet to come home and discover a grifter, or conman sleeping in it. Likewise, if I lose my car keys, society still manages to acknowledge that I am still the owner of my car.

And there's the much more important case. What if someone gets your keys? With bank fraud you will most likely get the money back. With crypto, not a chance.
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