3 ms·

The issue is that they do run fractional reserves, even if they aren't supposed to. Much like banks of the 1600s.

• darawk 9y ago
  They claim that they don't. If they do, that is a serious problem. Some of the exchanges have, but there is no evidence i'm aware of that points to any of the current major exchanges running a fractional reserve.
  • 3pt14159 9y ago
    The issue is that once there is evidence there is a bank run. Mt Gox wasn't supposed to, but they did. And there are others out there that I hear rumours about having 5 or 10% of their reserves stolen from hot wallets. Sure it's fine if there is never a run, but it's worth pointing out that this is a real threat vector.
    • darawk 9y ago
      Ya, no argument from me there. It's definitely a threat. I just don't think it should be stated as fact that they do run fractional reserves without evidence of that.