171–180 of 506 posts
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How does Kraken/proof of reserves ensure that in case of bankruptcy there are no creditors with higher privileges?
That's a good point. The exchange's remaining liabilities outside user deposits are still an unknown. (Or at least can't be verified in a trustless manner.)
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Well for starters they have over a thousand employees, plus office leases, plus I'm sure cloud provider fees, marketing, and more. There are expenses for sure.
It's definitely strange. Binance did $40 billion in volume in the last 24 hours. Even if their effective fee is only 1/100 of a percent that's $4 million. If we assume they do half that volume every day on average that's 730 million in revenue per year. Surely costs can't be that high?
Even an audited exchange like Coinbase that is trying to do everything right is still self reporting loses like $430M in quarter 1 of 2022 just by operating their business correctly. Not your keys, not your crypto. Anyone storing their crypto on any exchange has this risk.
For many users of these exchanges their entire interest in crypto is speculation/trading, which requires them to store their crypto with an exchange so they can trade it because the costs associated with transferring to and from the exchange repeatedly would be prohibitive.
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So what does that tell about the exchanges that are managed in an unauditable way...
Essentially that they are most likely dipping in to support either their operations or other projects from the customer funds. That's not proof, but I would not at all be surprised if there isn't a single one of them that is clean.
There are many banks in europe that will not open accounts for people who just moged there, unless they bring along plenty of money.
This simply means that having your coins on an exchange is the same a forfeiting them unless otherwise proven.
But the crypto exchanges double down on that, they speculate like the banks do, but with zero risk managment and oversight, the biggest accounting firms do not want to offer their services to them.
They have also leveled up their exit strategies, instead of the plain old run away, they run the business while they can extract money and then later they seek legal cover under the umbrella of bankruptcy laws.
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I may have misunderstood. The first paragraph of your comment seems reassuring (like it's just risk aversion at Mazars) but then: > If this was a canary in the coalmine it just started wheezing strangely and it looks a little dizzy. sounds like a reason to leave the mine (i.e. there's something really wrong and this is a warning sign).
If it sounded reassuring to you then I should work on my writing skills, it certainly wasn't meant that way. > sounds like a reason to leave the mine. Absolutely, if you have funds in this - and any other unaudited - exchange GTFO or you may lose everything. Either their claim that they have the funds is real and you get your money and later you can re-deposit it or you'll be at least not one of the ones left holding…
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Can you point to any indicator that it's anything else? EDIT: https://en.wikipedia.org/wiki/Fiat_money
Is there a central bank that can print or sell Bitcoin to stabilize its price? Is there a central bank that can set rates for BTC credits and deposits? If not, in what way is BTC a fiat currency?
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Well for starters they have over a thousand employees, plus office leases, plus I'm sure cloud provider fees, marketing, and more. There are expenses for sure.
It's definitely strange. Binance did $40 billion in volume in the last 24 hours. Even if their effective fee is only 1/100 of a percent that's $4 million. If we assume they do half that volume every day on average that's 730 million in revenue per year. Surely costs can't be that high?
Then comes office infrastructure, if any and cloud assets.
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For many users of these exchanges their entire interest in crypto is speculation/trading, which requires them to store their crypto with an exchange so they can trade it because the costs associated with transferring to and from the exchange repeatedly would be prohibitive.
If they are in just for speculating/trading, they could trade ETFs denominated in BTC or ETH on regulated banks.
"To prepare a proof of reserves report, an auditor uses procedures agreed with the company but does not vouch for whether those procedures are appropriate. The auditor also does not give any assurance or opinion over the numbers in the report, as it would in a full financial audit." What does it say that a lower-tier accounting firm wouldn't even complete this garbage process?
Cz said to CNBC that the big four can't audit a crypto exchange. Then the reporters told him that Coinbase is audited by Deloitte. He didn't really have an answer, it's quite awkward clip.
I disliked working with Deloitte at my first real job, i thought they were asking too much details and putting some useless constraints that had nothing to do with opsec in real life, and that we (me and the manager) had to lightly bullshit through.
Then I worked at a big bank, with an internal audit team, and tbh, I think retrospectively working with Deloitte was the best experience I could have, they are really professional and their price is less surprising to me now. Looking back, i just didn't know better.
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You would be surprised at human greed. Was it last week when there was an interview with several "investors", and pretty much all of them admitted they knew they were speculating in a highly volatile and unregulated market before they lost all their savings in FTX' crash? They knew the risks, they tried anyway, some really needed that money.
It is greed for sure. But it is also the lack of legit opportunities to invest, unless one is an accredited investor. I found a handful of places I wanted to invest, but I can't, because I am not an accredited investor. I am left with stock market and crypto. It is super funny (sad?) that I can go to Vegas and blow up my life savings in a matter of hours. There are no rules to save me from that. But there are rules c…
I think you mean lack of legit opportunities to get rich quick, which is not a new phenomenon. Getting rich quick requires a lot of luck.