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Skimming through this I've come to some conclusions:- A reliable banking partner is prerequisite to run a fiat-crypto exchange. Loss of banking partner is fata

Skimming through this I've come to some conclusions:- A reliable banking partner is prerequisite to run a fiat-crypto exchange. Loss of banking partner is fatal to an exchange, and should immediately trigger a wind-down. On the flip-side, the banking partner should in good faith, continue to process withdrawals until the wind-down is complete. Bitfinex's refusal to wind-down after the Wells Fargo decision is irresponsible. Wells Fargo's decision to immediately stop processing withdrawals without a grace period is bad faith. Reliable banking relationships are difficult to maintain if you are not in the same jurisdiction with said bank. If you want to process USD, you have to be in the US. Multiple fiat-currency crypto exchanges are not sustainable due to this dynamic. I see a sustainable status-quo as fiat-exchanges becoming single-jurisdiction, single fiat-base. Ironically, just like most banks.

vkou 7y ago
> Multiple fiat-currency crypto exchanges are not sustainable due to this dynamic. And yet, multiple-fiat-currency exchanges are, for some reason, sustainable.
- Mengkudulangsat 7y ago
  Very few examples... Coinbase / Bitstamp / Kraken? People don't realize just how much of a tightrope they are walking on [1]. Serving crypto requires a deliberate business pivot [2], and not many are keen. This IMO is the largest hurdle crypto is facing for adoption. [1] https://diar.co/volume-2-issue-23/#2 https://diar.co/volume-2-issue-23/#2 [2] https://www.sec.gov/Archives/edgar/data/1312109/000119312518329074/d568616ds1.htm https://www.sec.gov/Archives/edgar/data/1312109/000119312518...
  - vkou 7y ago
    I'm talking about fiat exchanges that convert one fiat currency into another, and never touch crypto. They seem to figure out how to operate in multiple jurisdictions... But that's possibly due to the part where they comply with KYC and AML.
bitreality 7y ago
Bitfinex has been playing cat and mouse with banking for years. Even before Wells Fargo blocked their wires, they were in a nefarious banking situation. Bitfinex never wanted to take it slow and get themselves legal in the eyes of the US. This approach would work if they were much smaller. If they just had $100M under management or something, they'd probably be able to operate in their sketchy way. They'd need somewhere safe to keep $50-60M, then they could take a diversified risk with third party processors to move money to clients. But Bitfinex is just massive. They have billions under management. It's just not possible to hide these amounts of money when you are banned from the banking system. So yes, they should have shut down when Wells Fargo put the nail in the coffin. But like I said, by this point Bitfinex was already accustomed to opening new companies, new banks, hiding money and obfuscating its nature. For them it probably wasn't even considered. They just kept trying to move huge amounts of money around, but from what I understand, there have been multiple instances where their money has been frozen, seized, or outright stolen by third parties.

vkou 7y ago

> Multiple fiat-currency crypto exchanges are not sustainable due to this dynamic. And yet, multiple-fiat-currency exchanges are, for some reason, sustainable.

Mengkudulangsat 7y ago
Very few examples... Coinbase / Bitstamp / Kraken? People don't realize just how much of a tightrope they are walking on [1]. Serving crypto requires a deliberate business pivot [2], and not many are keen. This IMO is the largest hurdle crypto is facing for adoption. [1] https://diar.co/volume-2-issue-23/#2 https://diar.co/volume-2-issue-23/#2 [2] https://www.sec.gov/Archives/edgar/data/1312109/000119312518329074/d568616ds1.htm https://www.sec.gov/Archives/edgar/data/1312109/000119312518...
- vkou 7y ago
  I'm talking about fiat exchanges that convert one fiat currency into another, and never touch crypto. They seem to figure out how to operate in multiple jurisdictions... But that's possibly due to the part where they comply with KYC and AML.

bitreality 7y ago

Bitfinex has been playing cat and mouse with banking for years. Even before Wells Fargo blocked their wires, they were in a nefarious banking situation. Bitfinex never wanted to take it slow and get themselves legal in the eyes of the US. This approach would work if they were much smaller. If they just had $100M under management or something, they'd probably be able to operate in their sketchy way. They'd need somewhere safe to keep $50-60M, then they could take a diversified risk with third party processors to move money to clients. But Bitfinex is just massive. They have billions under management. It's just not possible to hide these amounts of money when you are banned from the banking system. So yes, they should have shut down when Wells Fargo put the nail in the coffin. But like I said, by this point Bitfinex was already accustomed to opening new companies, new banks, hiding money and obfuscating its nature. For them it probably wasn't even considered. They just kept trying to move huge amounts of money around, but from what I understand, there have been multiple instances where their money has been frozen, seized, or outright stolen by third parties.