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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

#341

Earlier quoted context omitted.

Debunked: http://jpkoning.blogspot.com/2019/09/the-life-and-death-of-i...

That article doesn’t “debunk” anything. Did you read it? Their argument is that a currency being “replaced” for “political, economic, and cultural reasons” isn’t a currency failing. What? If they’ve “debunked” the 27 year figure, then what is the correct average lifespan of fiat currencies?

> If they’ve “debunked” the 27 year figure, then what is the correct average lifespan of fiat currencies?

The question is kind of ill-formed in the first place. Take the current US dollar. How long has it been around? Per Wikipedia, it was established by Congress in 1792, which gives it a sedate 230 years of existence. But given that the original analysis is by a gold bug, I suspect the intent is to limit it only to the 51 years that have passed since the end of the gold standard in 1971.

If the goal of the question is to work out how long a fiat currency not backed by gold will last before it's hyperinflated into nothingness, then it stands to reason that the metric which best reaches that conclusion would be in fact the earlier date: the Nixon Shock wasn't an episode of hyperinflation (inflation reached a measly 10-20% annualized). Events like the creation of the euro are even more starkly not relevant to answering that question.

There's also severe methodological issues with completely omitting currencies that haven't failed yet, which ought to be patently obvious. There's another severe bias in terms of the inclusion of currencies on the list, since there's going to be several currencies for which is there is likely insufficient data to establish the lifespan correctly, because records tend not to preserve very well after several centuries.

To attempt to answer your question, I don't have any hard data in front of me. But I would be shocked if the mean lifespan of a currency were substantially less than a century--there are several currencies that lasted several centuries during the Medieval period, such as the ducat lasting ~730 years.

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

#342
post #126

Earlier quoted context omitted.

They haven't done anything wrong AFAIK; they didn't sign off on an audit, and withdrew, which is the reality of many smaller accounting practices taking on unfamiliar clients. Arthur Anderson knowingly fudged the numbers at Enron, and provided both accounting and consulting services, which was a big conflict of interest. The consulting arm came up with new type of revenue opportunities (energy contracts), and the acc…

It’s actually so nuts. People rarely get into the details of how crazy accounting was in Enron. They made an agreement to build a power plant, then booked 50 years of profit from operating it before they broke ground.

... and shortly after the deal was signed (and the projected profit added to the books), the contract was swapped out / "sold" to a subsidiary mostly owned by Enron, and selling this propped up the books even more.

The associated debt was in the subsidiary, and thus didn't show up on the balance sheet.

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

#343

Earlier quoted context omitted.

Exactly. However the serious participants in the cryptocurrency space have been begging for regulation. The complaint however is that the regulations that have been proposed are trying to pidgeonhole the different parts of digital assets and decentralised finance (not defi but decentralised financial services as a whole) into existing categories that they don't cleanly fit in. Cryptocurrency for example isn't a commo…

Begging for regulation, like SBF? Officially regulated or not, as an exchange you can still insist on a) have one of the big 4 adivise you on whether you are a bank, a broker or whatever else exists in finance b) define internal controls and processes based on a) and have c) one of the other big 4 properly audit you against b). SBF even admitted that his insistence on regulation was just a front.

Oh I agree. Traditional centralised exchanges (CEX) are largely normal exchanges. Of all the things in the cryptocurrency space, they are one of the only things that cleanly fits into an existing box.

Binance, FTX, Coinbase, Kraken, CoinEx, etc are all just traditional financial exchanges and should be forced to comply with existing regulations because they can. They can do traditional KYC and AML in addition to the controls you mentioned because they are centralised services that directly interact with traditional financial services (banking, wire transfer, etc) The only real open question for those services is asset classification.

If those services wanted to comply with regulations, they could do so voluntarily but they aren't actually interested in that like you mentioned.

The issue is that any time regulations come around, they end up misclassifying the network and decentralised projects in the process.

TLDR: Agreed on all accounts with regards to centralised exchanges. My main complaint is that so far the suggested regulations have not fit well onto the rest of the space.

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

#344
post #250

Earlier 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...

Binance just unverified everyone yet again , it's safe to say they're trying to prevent people from pulling out.

i just checked this and i'm still verified. i'm in europe though.

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

#345
post #250

Earlier 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...

You can have an audit on Monday and a founder transfer all the assets to an affiliate on Tuesday so timing risk makes this stuff irrelevant. Maybe time to make crypto decentralized?

> Maybe time to make crypto decentralized?

Is there money in that?

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

#346
post #330

Earlier quoted context omitted.

They didn't say that they passed, just that they claimed to "complete requirements" needed to pass. The financial engineering version of lying with facts like "assembled in USA from foreign components".

They claimed to have passed: 2021-07-21 "Yesterday, FTX became the first (?) crypto derivatives exchange to complete a GAAP audit!" -- https://mobile.twitter.com/sbf_ftx/status/142135472191111577... 2021-08 -26: "Both @FTX_Official and @ftx_us have passed US GAAP audits and plan to continue getting audits going forward." -- https://twitter.com/SBF_FTX/status/1431087427154849795

He doesn't seem to mention what third party completed the audit, and given what we know about FTX's accounting now that means it was either an internal audit or SBF was lying.

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

#347
post #250

Earlier 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...

Binance just unverified everyone yet again , it's safe to say they're trying to prevent people from pulling out.

Maybe CZs attempt to take down a competitor by leaking information wasn’t a good idea after all. Sad to see people hurt as it backfires in his face. No amount of public relations or spin will save binance at this point. The run has begun. It will seem slow at first and then all at once.

The only thing that would save it would be a bail out by the Chinese government.

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

#348
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…

is any exchange audited?

Audited? Isn't that what TradFi and Fiat Currency companies do?

Ewww, gross!

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

#349
post #291

Earlier quoted context omitted.

Money in general are traded for productive goods and services , not other kinds of money. That's why it's not negative sum. If you had a bunch of people trading between USD and GBP amd EUR and doing nothing else, that would be negative sum and look an awful like what people do with cryptocurrency.

I'm probably missing some critical part in my comparison, but crypto trading sounds awful lot like trading in stock markets.

You are missing the fact that stocks pays dividends, because stocks represent a piece of ownership of companies that generate profits.

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

#350
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…

is any exchange audited?

Coinbase is public and audited by a big 4 accountant every year (quarter?)
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