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Genesis' Crypto-Lending Unit Is Suspending Withdrawals in Wake of FTX Collapse

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Re: Genesis' Crypto-Lending Unit Is Suspending Withdrawals in Wake of FTX Collapse

#131

Post by AlexandrB »

birracerveza wrote: post #111
horsawlarway wrote: post #81

Earlier quoted context omitted.

Real question - why do you believe that "owning" your own coins matters? Further - why do you believe that ownership is related at all to the fact that you can keep ledger entry with your wallet on it? Ownership !== ledger entries. Ownership is a shared concept enforced by social constructs. It is not a fucking technical matter solved by a ledger. EX: You sign a contract to send me 1 bitcoin in exchange for my car. I…

You're still bound by meat-space and the rules of the universe. If someone gets in your house and beats you with a $5 wrench until you give him your seed phrase, you're still relying on the police to catch the thief, ledger or not. However, you're also not bound by arbitrary rules by arbitrary people that may or may not hold their end of the deal. YOU own your Bitcoin, and until YOU send it to someone it's YOURS. On…

I suggest reading Man's Search for Meaning[1]. That book made me realize that almost all freedoms are contingent on a functioning and just society. No amount of blockchain technology can change that - you will always be bound by arbitrary rules made by arbitrary people. The only freedom that might be absolute is the content of your own thoughts and how you perceive and react to your conditions.

So the question is: is money on a blockchain any more yours in a meaningful sense that money in a bank? Sure there's a record on a ledger that you have some bitcoin, but the value of that currency can be manipulated, you can be coerced into transferring those funds to someone else, or your currency can be blacklisted[2].

With the example of games, you can be banned or the item you "own" can be banned arbitrarily as well. Nothing on blockchain prevents the game from keeping a blacklist of items that are not allowed to be used. Sure you can trade stuff (maybe), but that's already possible on e.g. Steam. IMHO, one of the biggest outcomes of that has been illegal gambling rings that use CS: GO items as a proxy for currency - which is hardly a positive development.

[1] https://en.wikipedia.org/wiki/Man%27s_Search_for_Meaning

[2] https://cryptoslate.com/despite-tornado-cash-fiasco-bitcoin-...

Re: Genesis' Crypto-Lending Unit Is Suspending Withdrawals in Wake of FTX Collapse

#132

Post by boeingUH60 »

notch656a wrote: post #120
rmbyrro wrote: post #112

Earlier quoted context omitted.

Has it been done by you? If it's so easy with such high rewards, why don't you try an MVP the next weekend and see how it goes?

Obviously if I haven't personally done it, it isn't possible. I could also get rich knocking people in the head with bats and taking their wallets. For a little while. It's telling some people who let their true colors show, espousing ideas like "hey if I can make good money hurting others I'll do it, and why haven't you!" Crime is not hard, most houses are easily broken into, many people can be tricked, the human bo…

I think you're missing the point, which is that even in the world of crime, most intending criminals don't succeed. For every successful rug pull, there were probably 100 others that didn't gain any friction.

Re: Genesis' Crypto-Lending Unit Is Suspending Withdrawals in Wake of FTX Collapse

#133

Post by coffeebeqn »

bvrmn wrote: post #31
danuker wrote: post #21

Earlier quoted context omitted.

I hope they are regulated, not outlawed. As in, "you have to be ready for a 90% withdrawal at any time". This would have solved every problem.

And how to make it work with largely unstable crypto/fiat ratio?

For stable coins they have to be backed 100% by reserves of real currency. For crypto - well you just hold the crypto and don’t lend it out. If I give you 1 ETH, you just keep it in the wallet for me to withdraw on my leisure. Simple.

Re: Genesis' Crypto-Lending Unit Is Suspending Withdrawals in Wake of FTX Collapse

#134

Post by AlexandrB »

ALittleLight wrote: post #125
birracerveza wrote: post #111

Earlier quoted context omitted.

You're still bound by meat-space and the rules of the universe. If someone gets in your house and beats you with a $5 wrench until you give him your seed phrase, you're still relying on the police to catch the thief, ledger or not. However, you're also not bound by arbitrary rules by arbitrary people that may or may not hold their end of the deal. YOU own your Bitcoin, and until YOU send it to someone it's YOURS. On…

Why would game companies want you to be able to resell their in-game cosmetics? They could make that possible now, but don't.

Steam makes it possible, but this has also created a gambling black market: https://www.youtube.com/watch?v=eMmNy11Mn7g

Anything that can be easily traded for currency can also act as currency so you quickly fall down the KYC rabbit hole if you want to - for example - keep children from gambling.

Re: Genesis' Crypto-Lending Unit Is Suspending Withdrawals in Wake of FTX Collapse

#135

Post by karpierz »

throwup wrote: post #126
DebtDeflation wrote: post #110

Earlier quoted context omitted.

No, they do not. They only verify BTC and ETH, no other holdings, and they don't audit liabilities at all, meaning that they could be using your BTC as collateral for loans. Also, the audit they did last December was the second in 8 years and AKAIK they haven't done another since. Kraken is in no way "audited".

Full of misinformation. > They only verify BTC and ETH Click the link and you see this isn't true: "ADA ADA.S BTC BTC.M DOT DOT.S DOT.P etc etc" > they don't audit liabilities at all All liabilities were verified by the auditors and included in the merkle tree, and as mentioned, all users can independently verify that their specific liabilities are present. What more would you expect? > the audit they did last Decemb…

> All liabilities were verified by the auditors and included in the merkle tree, and as mentioned, all users can independently verify that their specific liabilities are present. What more would you expect?

Where in the report do they verify off-chain liabilities?

Re: Genesis' Crypto-Lending Unit Is Suspending Withdrawals in Wake of FTX Collapse

#136

Post by nradov »

JumpCrisscross wrote: post #127
jonathan-adly wrote: post #124

Earlier quoted context omitted.

You are right - that's the undergrad class in macroeconomics. A little more depth and you will find that it's not that black and white. A centrally-managed currency really has a terrible track-record everywhere in the world except maybe the US and Switzerland (emphasis on maybe). Political-pressure on the central bank, incompetence, corruption all add up to eventually break things. You have to have a lot of instituti…

> centrally-managed currency really has a terrible track-record everywhere in the world except maybe the US and Switzerland TIL nobody uses the euro, pound, yen or renminbi.

The pound (GBP) had a pretty serious management failure as recently as 1992. But cryptocurrencies are obviously no better on that score. Central banks have generally abandoned the idea of pegging their fiat currencies to other fiat currencies at fixed exchange rates, so that greater flexibility should reduce the risk of management failures going forward.

Re: Genesis' Crypto-Lending Unit Is Suspending Withdrawals in Wake of FTX Collapse

#137

Post by Mistletoe »

VHRanger wrote: post #47
dvt wrote: post #24

Maybe someone can explain this to me (not an expert in traditional finance), but how in the world are lending instruments not categorized as securities? Let's say I lend you 10 bucks (and I earn some interest on the money over time T), you give me a receipt/contract, and then I sell that receipt to someone else before T expires (the price I sell at is some complicated equation based on your chance to default, inflati…

The answer is that they almost certainly are securities, but the precedent isn't established. White collar prosecution is expensive and complex, and prosecutors care about their careers. They want certain wins, preferably fast. So the SEC are waiting for slam dunk cases to establish precedent. In practice this means they wait for something large and obvious to implode, and prosecute months/years after the fact.

Somehow the SEC can’t even win a case against XRP which fails the Howey Test miserably. If XRP isn’t a security I don’t know what is.

is: (1) an investment of money, (2) in a common enterprise, (3) with the expectation of profit and (4) to be derived from the efforts of others.

Re: Genesis' Crypto-Lending Unit Is Suspending Withdrawals in Wake of FTX Collapse

#138

Post by jcranmer »

throwup wrote: post #90
DebtDeflation wrote: post #75

Earlier quoted context omitted.

>Do they regularly publish independently-verifiable audits? Which exchange does this? I'm not talking about finding some mom and pop accounting shop to issue a 1 page report stating they checked on a certain date and the reserves were there, where the majority of the 1 page was a disclaimer stating that this wasn't technically an "audit" and should not be relied upon as such.

Kraken does at least. AIUI their auditor is given a snapshot of all account balances at a particular point in time, and builds a merkle tree. You can then reconstruct your expected merkle leaf and verify that your specific account was included in the tree. You can verify on the auditor's website, or you can do it by hand. Kraken's help page even has code snippets in Python/Go/etc to make it easy! More info: https://w…

At the bottom of the proof-of-reserves page:

> The procedure cannot identify any hidden encumbrances or prove that funds had not been borrowed for purposes of passing the audit.

In other words, this is a fancier version of the kind of attestation that Tether makes, the ones that leave loopholes you can drive dump trucks through.

Re: Genesis' Crypto-Lending Unit Is Suspending Withdrawals in Wake of FTX Collapse

#140

Post by throwup »

karpierz wrote: post #135
throwup wrote: post #126

Earlier quoted context omitted.

Full of misinformation. > They only verify BTC and ETH Click the link and you see this isn't true: "ADA ADA.S BTC BTC.M DOT DOT.S DOT.P etc etc" > they don't audit liabilities at all All liabilities were verified by the auditors and included in the merkle tree, and as mentioned, all users can independently verify that their specific liabilities are present. What more would you expect? > the audit they did last Decemb…

> All liabilities were verified by the auditors and included in the merkle tree, and as mentioned, all users can independently verify that their specific liabilities are present. What more would you expect? Where in the report do they verify off-chain liabilities?

I'm still not quite sure you're after, but I guess it would be this quote on page 3:

> 14) Compare the total liabilities from the Client Liability Report extracted from Kraken’s production database as observed within Procedure 5 to the total assets controlled by the Kraken custodied addresses (the “In-Kind Assets”) as of the specified date and time of the assessment time and calculate the collateralization ratio based on the In-Kind Asset-to-Client Liability mapping provided by Kraken Management

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