A company under criminal investigation might have solvency issues? Someone got a set of pearls I can clutch? https://fortune.com/crypto/2022/12/12/binance-investigation-...
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Binance outflows hit $6B as Mazars halts ‘proof of reserves’ work
301–310 of 506 posts
Re: Binance outflows hit $6B as Mazars halts ‘proof of reserves’ work
#302Earlier quoted context omitted.
> argument is that a currency being “replaced” for “political, economic, and cultural reasons” isn’t a currency failing. What? Did the Deutsche Mark fail when it was replaced by the Euro? Come on.
Did the Reichsmark and Rentenmark fail when they were replaced 10:1 for Deutschmarks, losing 90% of their face value? Yes! You are cherry picking by choosing the Euro. The point is that valuation loss to currency printing is currency failure. The vast majority of currency “replacements” are just abrupt failures, and generally coincide with a country being overthrown by a new authority.
Prices also fell by 90% and everyone kept their savings with the Reichsmark, so I'd say no. Also, the Reichsmark collapsed because of the fall of Nazi Germany, it had nothing to do with the currency itself.
The Rentenmark was legitimately an absolute debacle, one of the worst of all time right up there with the Zimbabwean dollar
Re: Binance outflows hit $6B as Mazars halts ‘proof of reserves’ work
#303A company under criminal investigation might have solvency issues? Someone got a set of pearls I can clutch? https://fortune.com/crypto/2022/12/12/binance-investigation-...
Binance is China-owned so there's no problems, all criminal allegations are false, company is in great shape, and customer's assets are safe. What about Coinbase?
Re: Binance outflows hit $6B as Mazars halts ‘proof of reserves’ work
#304"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…
> If you have assets in an un-audited exchange, get them out now.
This is Mexican standoff. The only "value" crypto assets have comes from exchanges that will trade them for fiat. If crypto holders stop trusting exchanges and pull all their assets that will cause the exchanges to fail and those assets will then be worth nothing. On the other side if exchanges try to earn the trust of holders by becoming "fully transparent" it will be revealed that there's not nearly enough fiat reserves to support the current valuations. (It does no good for Binance to prove they have a reserve of $18B of Tether to back the $18BN BUSD marketcap if turns out Tether is actually mostly backed by Bitcoin that only has a USD value because it can be traded for BUSD...)
Re: Binance outflows hit $6B as Mazars halts ‘proof of reserves’ work
#305Earlier quoted context omitted.
> 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...
I don't think FTX actually applied or passed GAAP. From the filings it is clear they couldn't have. They barely have records of their liabilities, and definitely not of their assets. I am not even touching co-mingling of different classes of accounts. The statement you are referencing is another lie to customers and investors. I know they employed a "Decentraland" sketchy "auditor." But that's it. It is like employin…
> Both FTX and FTX.US have completed requirements to pass the US Generally Accepted Accounting Principles (GAAP) audit
This is legally meaningless. Literally anyone can say they completed requirements to pass, they didn't actually pass
Re: Binance outflows hit $6B as Mazars halts ‘proof of reserves’ work
#306Even 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.
How do you make that big of a loss just running a matching engine and a bit of regulatory overhead...
They had almost 5000(!) employees before the layoffs. I honestly can’t fathom what 90% do day to day
Re: Binance outflows hit $6B as Mazars halts ‘proof of reserves’ work
#307Re: Binance outflows hit $6B as Mazars halts ‘proof of reserves’ work
#308Earlier quoted context omitted.
If they are in just for speculating/trading, they could trade ETFs denominated in BTC or ETH on regulated banks.
Why not go all the way and have cash-settled futures that track random numbers?
> Why not go all the way and have cash-settled futures that track random numbers?
Ha, this is becoming my go-to definition of the lottery.
Re: Binance outflows hit $6B as Mazars halts ‘proof of reserves’ work
#309Earlier quoted context omitted.
Dipping into customers funds for operating expenses or other uses (loans to associated parties, investment, leveraging) is a big no for an exchange, obviously, whether or not it is fraud is ultimately for a judge to determine but it sure looks like that to me. The lure of those balances is invariably too great to resist.
> The lure of those balances is invariably too great to resist. I think the folks at JP, etrade, and all of the other regulated exchanges would object to that characterization.
Guess how most of those regulations came into existence?
Re: Binance outflows hit $6B as Mazars halts ‘proof of reserves’ work
#310"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…
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