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Binance temporarily suspends USDC withdrawals

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Re: Binance temporarily suspends USDC withdrawals

#111

Post by hef19898 »

Galanwe wrote: post #93
c7b wrote: post #88

Earlier quoted context omitted.

> Nobody is prepared for a bank run, that would be idiotic. It would mean storing strictly only liquid assets. Binance is a broker, not a bank. A bank run on a broker simply shouldn't be possible. A broker is supposed to hold whatever the customers want to hold on their behalf (in so-called segregated accounts, so that the assets belong to the users, even if the broker should go bankrupt). If the users want to withdr…

Holding does not mean holding _now immediately liquid assets_. For the 10000th time: no single broker has ever been instantaneously liquid.

Sure, but they are solvent enough, aren't they? Curious, if banks screw up and ruin customers nobody is out there defending traditional banking. Still, there are people defending SBF, FTX and Binance. Not sure how Binance will do, but it doesn't look good, does it?

Re: Binance temporarily suspends USDC withdrawals

#112

Post by c7b »

Galanwe wrote: post #93
c7b wrote: post #88

Earlier quoted context omitted.

> Nobody is prepared for a bank run, that would be idiotic. It would mean storing strictly only liquid assets. Binance is a broker, not a bank. A bank run on a broker simply shouldn't be possible. A broker is supposed to hold whatever the customers want to hold on their behalf (in so-called segregated accounts, so that the assets belong to the users, even if the broker should go bankrupt). If the users want to withdr…

Holding does not mean holding _now immediately liquid assets_. For the 10000th time: no single broker has ever been instantaneously liquid.

> Holding does not mean holding _now immediately liquid assets_

What do you mean by liquid? USDC is an ERC-20 token on Ethereum. 'Holding' it means having the private key to a wallet that has been credited with a positive balance in the smart contract. Transferring it is as easy as calling the transfer(address to, uint amount) function from that wallet - you'll have to charge the user for the transaction fee, but that's fair game. According to CZ's tweet, they don't actually hold USDC on behalf of the users, but they try to buy them on the market when users request withdrawals, which is simply not how a broker is supposed to act, and a recipe for disaster. Stop defending this practice.

Re: Binance temporarily suspends USDC withdrawals

#113

Post by Galanwe »

hef19898 wrote: post #94
Galanwe wrote: post #83

Earlier quoted context omitted.

How did you end up comparing Binance to a bank? The closest equivalent to what Binance is would be a broker. Now I challenge you to find any broker on the planet that can promise instant FX swap settlement on the same day for a cash account. Don't compare apples and bananas.

If I have someobe holding my crypto currency , that is as close to a crypto bank as it gets. Otherwise crypto woupdn't be money but some form of security. In which case, one has to ask, it is not regulated as such. And show me one broker that refused, regardless of transaction fees or other contractual stuff, customer wothdraels of funds. Other than those brokers that actually "lost" customer funds. Which is, by the…

> If I have someobe holding my crypto currency, that is as close to a crypto bank as it gets.

You don't get to define what is a bank, and "anyone holding my money" is definitely far from the definition of a bank.

USDC is _not_ USD. When you deposit 100 USDC to Binance and ask to withdraw USD, you are effectively making an FX swap between two currencies, even if these currencies are 1:1 pegged.

Again, there is simply no broker on the planet that will do that instantaneously. USD is 1 day settlement, you just won't get any better than that, unless the broker accepts to take the counterparty risk of paying you upfront. No existing broker will do that for any substantial amount.

Re: Binance temporarily suspends USDC withdrawals

#114

Post by LudwigNagasena »

antupis wrote: post #32
charcircuit wrote: post #19

Earlier quoted context omitted.

Why do people hold cash instead of having all of their money invested? Stablility is a feature. People want a stable store of value that is on chain.

Problem lies here that dodgy institutions without goverment supervision are issuing stable coins so you never know when some crypto guy is going to do rug pull. But first government backed stable coin which you can buy and sell fast will be huge.

As if government institutions are any more dutiful. The British banknotes still say “I promise to pay the bearer on demand…” as a big FU to all the holders.

Re: Binance temporarily suspends USDC withdrawals

#115

Post by nailer »

crypt1d wrote: post #108

I honestly expected more from the HN crowd. The comments here are disturbingly inaccurate and fear mongering. For those of you that don't want to sift through the BS and just get the gist (from someone deep in this space): - Binance suspended USDC withdrawals. You can still withdraw in other stablecoins, fiat, or crypto. You can withdraw BUSD and swap to USDC on another exchange (dex). So really, this is not a big de…

The point is that custody services should hold coins 1:1. Binance should already have the USDC on hand. They do not, because they swapped the currency their customers were holding.

Saying BUSD is the same as USDC is akin to saying UST is the same as USDC. They are not the same, they are backed by different entities with different behaviour and different reputations.

Re: Binance temporarily suspends USDC withdrawals

#116

Post by seydor »

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 people wanted to make a quick buck

Re: Binance temporarily suspends USDC withdrawals

#117

Post by rvz »

ivanmontillam wrote: post #38

What I fear is that U.S. Government is meddling with the only exchange that works properly in Venezuela and Argentina, especifically for the P2P trade. I know this tweet is not about P2P, but let me explain. In Venezuela and Argentina, the parallel markets are the true king of the economy. You have to exchange money using P2P exchanges if you want to barely have decent personal finances, you know, to access good curr…

A use case indeed for crypto, Especially if your friends and customers are from Argentina, Nigeria, Venezuela, Russia, Ukraine and Iran who's currencies have been totally de-vauled and close to worthless.

One can use that to send USDC worldwide, instantly, cheaply and can exchange that to their local fiat currency. USDC doesn't require an exchange at all, only if you are exchanging it to fiat.

Both pro-crypto and anti-crypto vocals are going to have to concede on their extremities and eventually settle with crypto sitting around for a very long time in a regulated setting.

Re: Binance temporarily suspends USDC withdrawals

#118

Post by jacquesm »

ivanmontillam wrote: post #68
unsigner wrote: post #58

Earlier quoted context omitted.

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…

The solution to that particular problem is simple, but it won't be found outside of Argentina. Think of it this way: if the fate of a country depends on a company that is not even physically present in that country then your problems are of an entirely different nature. Obviously other countries are not going to hold back on regulatory oversight of financial institutions because of some kind of persecution complex elsewhere, if anything Argentinians will benefit from this because there are fewer ways in which they can lose their money.

The typical order in which you address problems like these (looking at it historically) is to first fix your government, then to fix your economy and finally to reap the benefits from that. Argentina looked to me like it was heading in the right direction, this love affair with crypto is at best a distraction.

Re: Binance temporarily suspends USDC withdrawals

#119

Post by netheril96 »

plsbenice34 wrote: post #33
SilverBirch wrote: post #28

Ah yes, truly the peak of cryptocurrency "Sorry, we can't process that highly decentralized censorship proof freedom coin, we're waiting for our bankers in New York to wake up".

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.

It has no freedom either. Circle can block any address from spending USDC.

Re: Binance temporarily suspends USDC withdrawals

#120

Post by crypt1d »

nailer wrote: post #115
crypt1d wrote: post #108

I honestly expected more from the HN crowd. The comments here are disturbingly inaccurate and fear mongering. For those of you that don't want to sift through the BS and just get the gist (from someone deep in this space): - Binance suspended USDC withdrawals. You can still withdraw in other stablecoins, fiat, or crypto. You can withdraw BUSD and swap to USDC on another exchange (dex). So really, this is not a big de…

The point is that custody services should hold coins 1:1. Binance should already have the USDC on hand. They do not, because they swapped the currency their customers were holding. Saying BUSD is the same as USDC is akin to saying UST is the same as USDC. They are not the same, they are backed by different entities with different behaviour and different reputations.

They are not a custody service, they are an exchange. They are not obliged to hold USDC, if all customers have their assets in BUSD due to the conversions that happened. Are you expecting Binance to have 1:1 BUSD on hand, in addition to holding the same amount in USDC as well (so 2x the amount of funds deposited by the customers)?

Nobody said BUSD == USDC. But comparing it to UST (an algorithmic stablecoin nonetheless) is, at best, misleading.

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