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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

#161

Post by Exuma »

dheera wrote: post #152
soerxpso wrote: post #132

Earlier quoted context omitted.

> So effectively, Binance is refusing to honor its commitment to depositors to give them their money on demand. That's called a "default." What? So if I go into the bank at 4 AM and ask to withdraw $100,000, and they respond, "Sure, we'll need a few hours to get those funds together," the bank has defaulted?

Presumably they just need to wait until 9am when people at work, so I wouldn't consider that a default. If they say they need a few hours at 9am, they've defaulted. It would be a big "ha" if they couldn't get them together by 9:05am because they've done shady things with your money.

That's not how banks work

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

#162

Post by freejazz »

toomim wrote: post #145
freejazz wrote: post #128

Earlier quoted context omitted.

Because it's a nonsensical word that was only used by people to wave away obvious and legitimate criticisms. You don't see analysts reports in finance being called FUD, even when they are critical. That's because in the real world, people deal with and/or respond to criticism. In the crypto fantasy world, all of that is resolved just by calling it "fud".

In finance, they call it "irrational exuberance" or "irrational pessimism". In politics, they call it "misinformation" or "fake news". In slashdotting neckbeard techery, we say "fud". The term exists in all fields, but signals your tribal affiliation in your choice of symbol.

I disagree with your characterization and I point to my own.

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

#163

Post by anon291 »

tnel77 wrote: post #57
anon291 wrote: post #28

Earlier quoted context omitted.

> doesn’t seem like people holding their own keys are having a bad time right now Considering that, instead of owning productive assets that make society better as a whole and provide real value to people, they own tokens that so far do nothing and are only useful due to the exchanges, then yes... that's a pretty bad time.

There’s no denying that people “hodling” projects like “DickCoin” are probably having a bad time. I’d suspect that people who invested in more sound projects (Bitcoin and Ethereum, for example) might do just fine in a few years.

Ethereum has a potential use case for being productive (useful for ownership of digital assets). Bitcoin... that's difficult to see why it would be used.

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

#164

Post by locallost »

dheera wrote: post #152
soerxpso wrote: post #132

Earlier quoted context omitted.

> So effectively, Binance is refusing to honor its commitment to depositors to give them their money on demand. That's called a "default." What? So if I go into the bank at 4 AM and ask to withdraw $100,000, and they respond, "Sure, we'll need a few hours to get those funds together," the bank has defaulted?

Presumably they just need to wait until 9am when people at work, so I wouldn't consider that a default. If they say they need a few hours at 9am, they've defaulted. It would be a big "ha" if they couldn't get them together by 9:05am because they've done shady things with your money.

I'm not a fan of crypto, but that sounds like a stretch. I'm not aware you can go into any bank and withdraw e.g. a million just like that. It could be different in different countries, but there is a limit to what you can get done.

It could be careful manipulation on Binance's part, but we'll find out soon enough.

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

#165

Post by JumpCrisscross »

nordsieck wrote: post #119
govg wrote: post #106

Earlier quoted context omitted.

In terms of the Euro, I find it more useful to view the Eurozone as somewhat similar to the US. There's one central monetary policy for really large economies that in a different environment, would have liked to do things independently. It's especially relevant now as US states have GDPs comparable to the Eurozone constituent nations.

> In terms of the Euro, I find it more useful to view the Eurozone as somewhat similar to the US. There's one central monetary policy for really large economies that in a different environment, would have liked to do things independently. It's especially relevant now as US states have GDPs comparable to the Eurozone constituent nations. There is an enormous difference, though: internal mobility/identity. Germans tend…

> People in Oregon and New Hampshire tend not to have very strong affection for their state

No, but people in the South have an affinity for the South and people in coastal cities have an affinity for those, too.

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

#166

Post by kikokikokiko »

jasonlingx wrote: post #124
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…

So here’s where there might be some confusion, Binance consolidates a pool of different stable coins into 1 “BUSD” balance for its users[0]. Depositing any of these stablecoins into Binance will add to your BUSD balance, and you can withdraw from it as any stablecoin of your choice. What CZ is saying is that they ran out of USDC but have plenty of the other stablecoins instead. It sounds like they need to redeem the…

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.

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

#167

Post by jacobsimon »

rglullis wrote: post #131
rufusroflpunch wrote: post #113

Earlier quoted context omitted.

It’s not really any less of a dollar than any other dollar is. All of our digital dollars are just bank liabilities. Circle and Tether are just banks with dollar liabilities. Their liabilities can be transferred on crypto networks rather than traditional bank wires.

> Circle and Tether are just banks with dollar liabilities. But no regulatory oversight, and no chance for the common folk to prosecute or get their money back if they default. I am one of the resident crypto apologists here on HN, but there is no way that we should even try to accept what the big exchanges are doing. The whole point of crypto is to have systems that do not depend on "too big to fail" institutions, w…

Not trying to make excuses for any of these companies. I'm just saying, in the abstract, there are lots of reasons why an end user would want a stablecoin besides "avoiding regulations". Even if it weren't pegged to a national currency, there is value in having a digital currency that limits its volatility. Pegging to another currency is a shortcut for doing that w/o needing decentralized monetary policy.

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

#169

Post by kikokikokiko »

wmf wrote: post #148
dboreham wrote: post #65

Earlier quoted context omitted.

Wait...they're refusing to allow on-chain transfer of USDC from their custodial account to a customer's wallet? I assumed this was about exchange of USDC to fiat, hence the hand waving about banks.

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.

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

#170

Post by grey-area »

jacobsimon wrote: post #97
wpietri wrote: post #60

Earlier quoted context omitted.

> US dollar-like liquidity and value preservation without US dollar financial regulation. Or in other words, they'd like the benefits of regulation without the costs of regulation. Which I certainly appreciate. As a child my plan for adulthood was desserts all the time, no vegetables ever.

Stablecoins have totally valid use cases in the crypto ecosystem that don’t involve skirting regulations. People want something that isn’t volatile. It takes days to deposit and withdraw actual USD from exchanges and requires centralized entities that charge fees (or are totally untrustworthy as we’ve seen). Contracts and dapps can hold and interact with USDC to create useful applications that aren’t just speculative…

If a stablecoin is fully backed by USD, why does it exist?

The only reasons for these coins to exist are:

1. Avoid proper financial controls and regulations imposed on real currencies and operate illegally. 2. To separate fools from their USD and replace it with USDT or whatever.

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