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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

#441

Post by hyperdunc »

jacquesm wrote: post #435
echelon wrote: post #412

Earlier quoted context omitted.

There was so much going on during the pandemic. My early employee stock and the rest of my portfolio was booming, and I'd just made my yearly TC on GME. The dogecoin gains were smaller and kind of an afterthought. To top it off, the hard drive with the dogecoin was back at my mom's place or in storage, and it would have taken a lot of time to go back and find it. Since it was easy to leave the computer where it was,…

I think your degree of resilience in dealing with such setbacks is something to strive for, at the same time please be more careful in the future, the price of such setbacks tends to go up as you get older and even though you managed to get through this one in relatively good shape (if not financially, then at least mentally) the next time around you may not be so lucky.

What's this trend of telling others to please do something? I've seen it all over HN this year and it's so condescending.

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

#442

Post by niyikiza »

guipsp wrote: post #382
cj wrote: post #132

Earlier quoted context omitted.

Here's the un-editorialized full text from their SEC filing: > Moreover, because custodially held crypto assets may be considered to be the property of a bankruptcy estate, in the event of a bankruptcy, the crypto assets we hold in custody on behalf of our customers could be subject to bankruptcy proceedings and such customers could be treated as our general unsecured creditors. This may result in customers finding o…

You call it uneditorialized, but it is simply editorialized in a different direction.

Everything is literally editorialized (first by your brain, then by institutions). A charitable interpretation of the parent comment is that it is not editorialized relative to the original source.

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

#443

Post by SheinhardtWigCo »

raven105x wrote: post #438
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…

If you have assets in any* exchange, get them out now. Using regulated exchanges defeats the whole point. Fiat transaction fees are lower / nonexistent compared to CC ones so if you want to gamble on the relative value of something just stick to the stock market, and if you want to send currency on something that is regulated by a government anyways, might as well use Fiat. The only thing regulated exchanges do is pr…

Exchanges provide a lot of added value, at least ones that aren't run by criminals or idiots.

Wallet keys stored on a phone or laptop, or even a hardware wallet, are generally less safe than the reserve wallets of a major exchange. I can lose the device, it can break or be stolen, etc.

Writing down recovery phrases and stashing them in the sock drawer doesn't feel very safe either.

And if something happens to me, I feel quite sure that my family will get any crypto I have in my Coinbase account, but much less sure that they'll be able to recover any non-custodial wallets.

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

#444

Post by raven105x »

SheinhardtWigCo wrote: post #443
raven105x wrote: post #438

Earlier quoted context omitted.

If you have assets in any* exchange, get them out now. Using regulated exchanges defeats the whole point. Fiat transaction fees are lower / nonexistent compared to CC ones so if you want to gamble on the relative value of something just stick to the stock market, and if you want to send currency on something that is regulated by a government anyways, might as well use Fiat. The only thing regulated exchanges do is pr…

Exchanges provide a lot of added value, at least ones that aren't run by criminals or idiots. Wallet keys stored on a phone or laptop, or even a hardware wallet, are generally less safe than the reserve wallets of a major exchange. I can lose the device, it can break or be stolen, etc. Writing down recovery phrases and stashing them in the sock drawer doesn't feel very safe either. And if something happens to me, I f…

RE: personally stored keys are less secure ...this is very subjective. You don't "hand" your wallet keys to an exchange: you don't even have them. Meaning "your" CC is a lot like "your" USD in a bank: subject to taxes, send restrictions, asset freezes, IRS audits, and a whole host of other unnecessary and inconvenient crap. Being taxed on CC gains relative to the USD is ultimate hypocrisy. It's like being taxed on swiss francs or yen you hold if the exchange rate changes... except instead of an unlimited write-off for losses like traditional forex, the cap is $3000 to form a one-way YoY tax valve.

Literally nothing about the government's stance on or (severe lack of) understanding of cryptocurrencies makes any sense other than it definitely reminds me of good ole' Reagan: "If it moves, tax it. If it keeps moving, regulate it. And if it stops moving, subsidize it."

RE: if something happens to you ...that is an excellent point. You wouldn't get this without an exchange, yeah. If subjecting yourself to all of the above to reap this benefit is worth it to you, that's a favorable tradeoff to make and one you definitely should.

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

#445

Post by ddmitriev »

sdwr wrote: post #394
HDThoreaun wrote: post #219

Earlier quoted context omitted.

Perpetual futures don't require any margin. All it requires is matching buy side and sell side market participants and transferring money between their accounts as the underlying changes in value. The exchanges don't actually hold any underlying with perps, so there's no need to borrow money.

How does a perpetual future actually work?? What happens if 5 people buy the "sell" side and 1 person buys the "buy"? There's no way to redeem to the underlying, and I don't think the 1 person pays out 5x the price movement to the other side. An exchange can hedge vs excess buy orders by buying the underlying, but how do they hedge vs excess sells? I've been trying to figure out how to short BNB, and perps feel prett…

Each trade is bilateral. Futures, both regular and these "perpetual swaps" are zero-sum. A person buying is another person selling and vice versa. The exchange does not need to hedge the underlying because the exchange/clearing house is a neutral party in the transaction as long as the individual traders are solvent. What it is exposed to is traders blowing up and not being to cover their debts.

In case of regular futures, price discovery is aided by the fact that the futures eventually settle to either the underlying or its cash value at a specific point. In perpetual futures, price discovery is aided by "funding fees," which are periodic cash transfers from the side that is contributing to the price discrepancy between the future and the spot to the opposite side. E.g., if perp is below the spot, the short holders will periodically be charged the funding fee, which will go to the long holders, to encourage the shorts to buy/get the price closer to spot, etc.

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

#446

Post by jcranmer »

roenxi wrote: post #423
jcranmer wrote: post #341

Earlier quoted context omitted.

> 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…

I do broadly agree, the "27 years" figure is a rhetorical number that doesn't mean anything in itself. That said... > 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 That isn't completely fair. The ducat lasted ~730 years and preserved a reasonably consistent amount of value all through that time. Someone holding a dollar in 1…

> The ducat lasted ~730 years and preserved a reasonably consistent amount of value all through that time.

Not really. Inflation long predates modern times, there's a reason that the terminology is called "debasement" (adding base metal to gold coins). I don't have hard numbers on the value of the ducat (because that pretty much requires trawling historian journals I don't have access to), but judging from other coins that pop up, the annual inflation rate would have averaged perhaps 0.5% for the Medieval and Early Modern.

Why should a steady 2-5% inflation rate in modern times be considered destructive to value, but not the steady 0.2-1% of earlier periods?

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

#447

Post by nwienert »

oblio wrote: post #366
pfoof wrote: post #333

Ok, so "web3-metaverse-blockchain" bubble is bursting, only the AI one is growing in a good direction.

ML is backed by solid science from the 80's and we've always known it would have uses, we just didn't have the computing power for it.

AI hasn’t threatened anything yet (in a not good way), so it hasn’t met regulation.

Crypto threatened monetary systems, finance, VC, banks… and because of that attracted both all the money and all the ammunition from this recent QE hyper bubble. Now as it pops it’s very easy to say “look see it sucks,” but this shallow analysis, will it hold outside of the current recession?

AI makes lots of splashy headlines but where’s the actual value outside upgrading existing big tech? Sure search and recommendations but what else?

The artistic stuff gets tons of attention but what’s the market cap there - even Hollywood is small compared to finance.

And as it does encroach on bigger industries it’ll face new problems: resistance from humans (copyright/regulation, cultural) and having to contend that by definition it produces “average” works.

Like how remixed music became hugely popular and died off, AI produces remixed content, but humans want fresh. Look at music, film, fashion, anything really creative that AI looks like it’s edging in on - all those industries are driven by fresh content, new perspective. So I see it accelerating things but not revolutionizing, and as it’s very nature draws value from the masses and gives it to the few, it’ll eventually hit hard resistance from voters, unions.

Meanwhile crypto has a ton of problems - UX, scaling, regulation - but it also has good fundamentals in that it stands to distribute power towards the masses and they drive adoption. And if there’s any trend in tech that’s been constant since the 70s it’s that the companies that can deliver value to the largest amount of people succeed.

Am I super confident this is how it plays out? No, this is just a spitball. AI could solve the creativity issues, tech companies can make it seem consumer friendly through tons of persuasion, it may keep scaling well, and big tech can lobby like hell. Likewise crypto can’t outspend finance, and the bubbles and scammers have soured many.

If you look at actual value both now and in the near future, AI is a lot of hot air, people love to share these new images but wheres the revolution in industry? Being both average and a theft at once, combined with being being easy to legislate via copyright is a bad combo.

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

#448

Post by roenxi »

jcranmer wrote: post #446
roenxi wrote: post #423

Earlier quoted context omitted.

I do broadly agree, the "27 years" figure is a rhetorical number that doesn't mean anything in itself. That said... > 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 That isn't completely fair. The ducat lasted ~730 years and preserved a reasonably consistent amount of value all through that time. Someone holding a dollar in 1…

> The ducat lasted ~730 years and preserved a reasonably consistent amount of value all through that time. Not really. Inflation long predates modern times, there's a reason that the terminology is called "debasement" (adding base metal to gold coins). I don't have hard numbers on the value of the ducat (because that pretty much requires trawling historian journals I don't have access to), but judging from other coin…

> Why should a steady 2-5% inflation rate in modern times be considered destructive to value, but not the steady 0.2-1% of earlier periods?

Because they are different by an order of magnitude. Over a 70 year lifetime, at 0.2% inflation a coin is worth 90% of its value at the start of the life. At 2%, it is worth a hair less than 25% (at 5%, it would be effectively worthless because the coin has lost 97% of its initial value). That is quite a different outcome - one of those rates I could save using coins and not do too terribly in real terms.

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

#449

Post by dragonwriter »

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 passed a GAAP audit and was still broke

Not a finance pro, but as I understand it:

A GAAP audit is not a test for whether or not you are broke.

It is also not a test of whether your financials are honest (except in a very limited sense).

It is a test of whether or not your various pieces of financial information are internally consistent given a standard set of definitions of how pieces should relate, and therefore that summary documents like the balance sheet are accurate, assuming the accuracy of underlying records.

While it is an important quality of work check for internal accounting, if you wouldn’t trust a company without a GAAP audit, there are very few scenarios where having the audit should significantly move the needle of trust.

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

#450

Post by dragonwriter »

JumpCrisscross wrote: post #277
jefftk wrote: post #272

Earlier quoted context omitted.

Prager Metis for international, Armanino for US: https://www.coindesk.com/business/2022/11/11/meet-the-metave...

Prager Metis and Armanino worked with FTX, but I can’t find anything showing they completed an audit. (Far from blameless. Both seem riddled with issues [1].) [1] https://www.ibtimes.com/crypto-auditors-under-fire-ftx-meltd...

> Prager Metis and Armanino worked with FTX, but I can’t find anything showing they completed an audit.

The FTX et al. bankruptcy filing (by the post-SBF CEO) refers to the existence of audited financials for the WRS silo (which includes FTX.US) by Armanino and Dotcom silo (which includes FTX proper) by Prager Metis, with the other silos not having audited financials. This seems to be a fairly strong indication that the audits were completed.

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