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Binance outflows hit $6B as Mazars halts ‘proof of reserves’ work

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Re: Binance outflows hit $6B as Mazars halts ‘proof of reserves’ work

#261

Post by sudosysgen »

dmitriid wrote: post #207
kevinak wrote: post #158

Earlier quoted context omitted.

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?

> Binance did $40 billion in volume in the last 24 hours. It didn't > Even if their effective fee is only 1/100 of a percent that's $4 million. It's not. The reason? They "traded" fictitious currencies whose "value" is pure speculation and nonsense. Their fees are also denominated in these fictitious currencies. However, neither the offices they rent nor the people they employ have any interest in these, because rent…

If there is enough volume in these trades to make appreciable fees then there is enough to continuously sell it.

Re: Binance outflows hit $6B as Mazars halts ‘proof of reserves’ work

#262

Post by JumpCrisscross »

Lerc wrote: post #255
JumpCrisscross wrote: post #248

Earlier quoted context omitted.

> downvoted for suggesting a company might be solvent The comment said they are solvent. Not that they might be. Given the present facts and circumstances, that’s unfounded. (EDIT: Never mind.)

No they didn't. The "5)" was indicating a further option. That is very much a suggestion and not a statement of fact.

Fair enough. It’s a remote possibility for a company with literally no known legal structure and under criminal investigation in multiple jurisdictions, but sometimes unicorns fart rainbows.

Re: Binance outflows hit $6B as Mazars halts ‘proof of reserves’ work

#263

Post by dougSF70 »

tbrownaw wrote: post #194
dougSF70 wrote: post #114

Earlier quoted context omitted.

The seem to be banks and exchanges. NYSE and Nasdaq are exchanges but don't hold customer funds they execute trades and that is it. These crypto exchanges are more like banks...and that is the problem. Until banks allow crypto accounts and connection to exchanges this will keep happening.

Something closer to a retail brokerage, maybe?

And they shouldnt be allowed to trade or issue tradeable tokens. Something like the Glass-Stegall act, abolished by Clinton.

Re: Binance outflows hit $6B as Mazars halts ‘proof of reserves’ work

#264

Post by fabian2k »

jefftk wrote: post #250
Animats wrote: post #72

"Binance has said it holds more than $60bn in assets, enough to honour withdrawals. The company’s disclosures do not include its liabilities, which makes it difficult to ascertain its financial health." Possibilities: 1) They're insolvent. Liabilities exceed assets. (Like FTX.) 2) Their accounting is so screwed up they can't produce a balance sheet. (Like FTX). 3) They have a large number of interconnected corporate…

> Full GAAP audit or we all assume you're broke. FTX passed a GAAP audit and was still broke. Safer just to take custody of your coins while your still can. 2021-08-27: " Both FTX and FTX.US have completed requirements to pass the US Generally Accepted Accounting Principles (GAAP) audit " https://blockworks.co/news/ftx-joins-coinbase-kraken-with-us...

FTX had many parts, did that audit actually cover all of them or was that just for a subset of companies?

Re: Binance outflows hit $6B as Mazars halts ‘proof of reserves’ work

#265

Post by yieldcrv »

jeffreyrogers wrote: post #165
godzillabrennus wrote: post #86

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.

AMMs have solved this. The competition is amongst AMMs solving this better than they currently do. The need of custodial exchanges for trading is done. They can be just fiat onramps now as long as liquidity improves on AMMs.

Re: Binance outflows hit $6B as Mazars halts ‘proof of reserves’ work

#267

Post by onlyrealcuzzo »

europeanguy wrote: post #236
funstuff007 wrote: post #227

If they're in such dire straights, how is it $BNB is hanging there? Is Binance defending their own magic bean? What is the cost of doing so? https://finance.yahoo.com/quote/BNB-USD/

I'm not suggesting you're wrong, but would you care to clarify how exactly binance being "in dire straits" (in the sense of not being able to honor withdrawals, I presume you mean) would affect the value of BNB?

There's not much BNB volume outside of Binance: https://coinmarketcap.com/currencies/bnb/markets/

They could defend the price pretty easily by rigging the price on their exchange by printing BUSD to buy BNB.

I will be shocked if we don't find proof they've done this in the past.

You can do this w/o screwing customers.

Let's assume that some percentage of BUSD is legit (likely a lot of it is).

This means BUSD has some value. Let's say everytime someone converts real money to BUSD - Binance spends 100% of treasuries and then an additional 10% to buy BNB.

They can keep that 10% in their own wallet - and if the value of BNB someone goes to $0 with them playing this game - they can just wipe that account out. They still have all the treasuries to pay their real customers.

However, if you're doing fraud - you're probably doing a lot more of it than this... So you probably won't be able to pay out your customers, because you probably blew all their money on coke and hookers like FTX and every other crypto company so far.

Re: Binance outflows hit $6B as Mazars halts ‘proof of reserves’ work

#268

Post by fshbbdssbbgdd »

chx wrote: post #240
jeffreyrogers wrote: post #165

Earlier quoted context omitted.

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.

You are so close All current crypto"currencies" which use transaction fees (which is practically all of them) are negative sum games and thus are scams. This is so simple and people waste billions on not understanding it.

Money in general has transaction costs - even cash decays every time it changes hands. Is it all a negative sum game? It seems that in order to make that claim, you need to make some comparison between the value produced and the costs incurred. IMO, crypto is pretty scammy but there is some value (note that crypto is most popular in countries with unstable economies and corrupt governments). A crypto that’s optimized for lower transaction fees could be net positive.

Re: Binance outflows hit $6B as Mazars halts ‘proof of reserves’ work

#269

Post by funstuff007 »

europeanguy wrote: post #245
funstuff007 wrote: post #239

Earlier quoted context omitted.

Yes, my poetic license path is very heavy withdrawals -> bank run -> dire straits (money for nothing pun). $60B in assets, $8B in withdrawals. Even if all the assets are correctly valued, I don't anyone would envy their position. But given their own coin in holding in there, maybe they are devoting some money to defend it, or maybe they are actually in decent shape and can handle this quasi bank run. More succinctly,…

> if they were really toast, then $BNB would be cratering Why exactly, though? That's what I'm asking. I promise I'm not trolling, I just don't understand the connection.

My presumption is Binance is the buyer of last resort for $BNB.

Re: Binance outflows hit $6B as Mazars halts ‘proof of reserves’ work

#270

Post by ineedasername »

funstuff007 wrote: post #239
europeanguy wrote: post #236

Earlier quoted context omitted.

I'm not suggesting you're wrong, but would you care to clarify how exactly binance being "in dire straits" (in the sense of not being able to honor withdrawals, I presume you mean) would affect the value of BNB?

Yes, my poetic license path is very heavy withdrawals -> bank run -> dire straits (money for nothing pun). $60B in assets, $8B in withdrawals. Even if all the assets are correctly valued, I don't anyone would envy their position. But given their own coin in holding in there, maybe they are devoting some money to defend it, or maybe they are actually in decent shape and can handle this quasi bank run. More succinctly,…

Collapses often happen very gradually (in a time span relative the the majority proportion of the collapse) and then all at once.

As such, its failure to collapse as the crisis continues is not strong evidence that it’s not toast. Consider the examples of any system subject to cascading failures. But neither is there sufficient evidence to determine if it’s in the early stages of a death spiral.

What seems clear to me is that it’s unlikely to improve in value in the very short term, and might indeed collapse, so it could be prudent to transfer assets out while there’s still liquidity to do so especially in light of recent collapses. Of course this has the downside of accelerating or even making a collapse a self-fulfilling prophesy: that’s inherent to the nature of any asset where user confidence is a tent pole of stability.

It is also why traditional finance has evolved mechanisms to have lenders of last resort so that there is no death-spiraling perverse incentive to get your money out early in those situations. But that sort of back stop takes truly massive resources that need to dwarf those of the potentially failing organizations, which is why you see nation-states filling the role. It may take a nation issuing debt against the guarantee assets of a $trillion+ GDP (and really the taxation ability that comes with, though even that oversimplifies things…) in order to back stop and perform that role for organizations on the scale of many $Billions.

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