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Most of these entities probably don’t have that much liquid cash. Are they going to need to sell a bunch of crypto to pay the fine? $100M is a huge amount in th

Most of these entities probably don’t have that much liquid cash. Are they going to need to sell a bunch of crypto to pay the fine? $100M is a huge amount in these shallow markets.

deleted 5y ago
[deleted]
huac 5y ago
A single block order taking out $100M of liquidity could move markets but it's not a priori that big. Bitmex has $1-2B of daily trade volume (per nomics) even after all of the controversy, Binance has $50B and FTX has $11.5B.
- vngzs 5y ago
  Yeah, but trading volume is not liquid cash. It's not the exchange's money. They make money on fees / commissions, but they can't just dip into the customer funds and use them to pay the government.
  - rootsudo 5y ago
    You'd think but look at Mt. Gox.
    - ur-whale 5y ago
      > You'd think but look at Mt. Gox. Gox was a ridiculously amateurish affair run by a french pimply php hacker and manga lover teenager. Bitmex is in a slightly different league.
  - gruez 5y ago
    >but they can't just dip into the customer funds and use them to pay the government. But if they have $1B-2B worth of trade volume daily and they charge a 0.1% fee per trade, wouldn't that mean they're generating $1M daily in revenue? From that, wouldn't it be reasonable to assume they have profits accumulated to pay the fine?
- schmichael 5y ago
  How is trading volume related to cash liquidity? An exchange with 0 fiat on/offramps and no cash in the bank could still trade billions of USD worth of cryptocurrencies a day.
  - gruez 5y ago
    >How is trading volume related to cash liquidity It's not. The parent commentis talking about the liqudity of the market as a whole (ie. what would happen if 100M worth of bitcoin was sold at once) >An exchange with 0 fiat on/offramps and no cash in the bank could still trade billions of USD worth of cryptocurrencies a day. It would presumably have millions of USD worth of crypto in their wallet (since they charge trading fees). They can take the crypto and dump it into the very liquid bitcoin market to turn it into cash.
latchkey 5y ago
$100m is peanuts in crypto now. A Chinese defi site just got hacked for $600m today.
- schmichael 5y ago
  $100m of USD is different from $600m worth of cryptocurrencies.
  - whynotkeithberg 5y ago
    It is in a market without liquidity... However, in a market with enough trading volume from enough unique people there isn't that much of a difference. especially not in a market where hundreds of million get dropped in literal minutes.
  - latchkey 5y ago
    Much of the theft was in pool1 tokens... eth/btc/usd... in fact, the hacker could have taken more, but left a lot of the shttokens on the table just because it was wasted effort.
- whynotkeithberg 5y ago
  Exactly. Someone else commented that 100m in USD is way different than 100 worth of crypto... But that's just not true anymore. 100 million in a highly liquid market where you can see 100 million dropped on a single exchange in a single minute candlestick on bitcoin alone, then it really isn't that much of a difference.
  - arcticbull 5y ago
    100M USDT yeah, USD who knows? It's 85% of trading volume. Check out the plot on Coinlib. [1] Today's USD trading volume was $193M while USDT was $5.2B. USD trading volume is a rounding error against USDT volume. 100M USD is more than 1/2 of the entire day's trading volume of BTC against real dollars. My understanding is the CFTC doesn't take Tethers. [1] https://coinlib.io/coin/BTC/Bitcoin https://coinlib.io/coin/BTC/Bitcoin
graeme 5y ago
900 Bitcoin are mined each day. If we make two assumptions we can get an estimate of how much fiat enters the markets each day: * Bitcoin mining is an efficient market and there are no profits * Bitcoin miners sell all of the bitcoin they mine These assumptions aren't exactly realistic but over the long run they should actually be close enough to the truth. Given those assumptions, at current market rates then an extra $41,121,180 has to enter the markets each day to keep prices stable, assuming buy/sell demand is otherwise equal. More than that wanting to enter, prices go up, less, prices go down. Leaving aside price manipulation by Tether, Binance etc (THIS is a big assumption, but the exercise is still valuable I think). So, the fine is only 2.5x the daily excess needed to keep prices stable. Shouldn't have a giant effect. (You may wonder, if no profits, what are the miners doing? Essential the bitcoin network is an organized effort to take capital, acquire coal, and burn it. Contrary to "store of value" claims, literally all money invested into bitcoin either gets burned up, or goes to pay someone who entered bitcoin previously. It's an entirely negative sum game, with guaranteed capital losses in aggregate. However, this added $100 million is not a meaningful amount in view of the actual scale of energy burnt each year to run the network. It might be a meaningful amount of Bitmex's capital, but likely this won't wreck them on its own.)
- mdoms 5y ago
  Your post assumes that there's no manipulation of the market occurring, an assumption we know to be false.
  - csomar 5y ago
    I don’t think the miners can manipulate their energy bill, salaries, rent, hardware costs, etc…
    - Clewza313 5y ago
      The OP's assumption was that $42M in fiat has to enter every day to keep prices stable. Manipulation can definitely keep prices stable without a net fiat inflow... until one day it can't, because as you note the bills have to be paid in fiat, not Tether etc.
felixbraun 5y ago
They have $1.7b in the insurance fund and take in $300-500m / yr (easy calculation if you know their fees and volume, which is known to be "real"; Bitmex is absolutely legit and it is disturbing that charges against their founders continue)
- Permit 5y ago
  > Bitmex is absolutely legit and it is disturbing that charges against their founders continue When you say "absolutely legit" what exactly do you mean? That they clearly have anti-money laundering programs in place? Or do you mean they are "absolutely legit" in the sense that they created a foreign entity that shouldn't be held to U.S. anti-money laundering laws?
- ac29 5y ago
  Legit since when? They signed a consent degree and have agreed to pay this huge fine. They are absolutely guilty of what they are accused of here - they allowed US persons to trade in violation of US futures laws. They were trying to play the "we block US IPs, therefore we block US persons" card, which is laughable enough that they were never going to fool anyone serious.
  - EVa5I7bHFq9mnYK 5y ago
    Deutsche Bank pays fines of hundreds and even billions of dollars on almost monthly basis (for money laundering, fraud, currency manipulation etc). That doesn't make it not a legit bank.
ur-whale 5y ago
> $100M is a huge amount in these shallow markets. Is it? What are your sources?
- arcticbull 5y ago
  Coinlib says USD trading volume today was $193M vs $5.2B in 3%-backed ersatz dollars (USDT). So that's 60% of a day's entire trading volume globally. [1] https://coinlib.io/coin/BTC/Bitcoin https://coinlib.io/coin/BTC/Bitcoin
  - ur-whale 5y ago
    I very much doubt the USistan racketeer will demand its dues to be paid in full the day after tomorrow. I also very much doubt that selling USD 100M worth of crypto over the course of a couple of months will have any sizable effects on the markets.
    - jkhdigital 5y ago
      Especially when you’ve got companies like Tesla buying $1.5B. All it takes is one more midsize corporate CFO getting redpilled and converting a chunk of the treasury into crypto.
      - arcticbull 5y ago
        Tesla's purchase covered about 5 weeks of miner fees. It burned up long before it was even announced.
vmception 5y ago
The markets aren't that shallow.
fuddle 5y ago
They just sponsored an Italian soccer team, so they must be doing okay. https://www.acmilan.com/en/news/articles/sponsor/2021-08-10/bitmex-joins-ac-milan-as-first-ever-sleeve-partner https://www.acmilan.com/en/news/articles/sponsor/2021-08-10/...

Most of these entities probably don’t have that much liquid cash. Are they going to need to sell a bunch of crypto to pay the fine? $100M is a huge amount in these shallow markets.

deleted 5y ago

[deleted]

huac 5y ago

A single block order taking out $100M of liquidity could move markets but it's not a priori that big. Bitmex has $1-2B of daily trade volume (per nomics) even after all of the controversy, Binance has $50B and FTX has $11.5B.

vngzs 5y ago
Yeah, but trading volume is not liquid cash. It's not the exchange's money. They make money on fees / commissions, but they can't just dip into the customer funds and use them to pay the government.
- rootsudo 5y ago
  You'd think but look at Mt. Gox.
  - ur-whale 5y ago
    > You'd think but look at Mt. Gox. Gox was a ridiculously amateurish affair run by a french pimply php hacker and manga lover teenager. Bitmex is in a slightly different league.
- gruez 5y ago
  >but they can't just dip into the customer funds and use them to pay the government. But if they have $1B-2B worth of trade volume daily and they charge a 0.1% fee per trade, wouldn't that mean they're generating $1M daily in revenue? From that, wouldn't it be reasonable to assume they have profits accumulated to pay the fine?
schmichael 5y ago
How is trading volume related to cash liquidity? An exchange with 0 fiat on/offramps and no cash in the bank could still trade billions of USD worth of cryptocurrencies a day.
- gruez 5y ago
  >How is trading volume related to cash liquidity It's not. The parent commentis talking about the liqudity of the market as a whole (ie. what would happen if 100M worth of bitcoin was sold at once) >An exchange with 0 fiat on/offramps and no cash in the bank could still trade billions of USD worth of cryptocurrencies a day. It would presumably have millions of USD worth of crypto in their wallet (since they charge trading fees). They can take the crypto and dump it into the very liquid bitcoin market to turn it into cash.

latchkey 5y ago

$100m is peanuts in crypto now. A Chinese defi site just got hacked for $600m today.

schmichael 5y ago
$100m of USD is different from $600m worth of cryptocurrencies.
- whynotkeithberg 5y ago
  It is in a market without liquidity... However, in a market with enough trading volume from enough unique people there isn't that much of a difference. especially not in a market where hundreds of million get dropped in literal minutes.
- latchkey 5y ago
  Much of the theft was in pool1 tokens... eth/btc/usd... in fact, the hacker could have taken more, but left a lot of the shttokens on the table just because it was wasted effort.
whynotkeithberg 5y ago
Exactly. Someone else commented that 100m in USD is way different than 100 worth of crypto... But that's just not true anymore. 100 million in a highly liquid market where you can see 100 million dropped on a single exchange in a single minute candlestick on bitcoin alone, then it really isn't that much of a difference.
- arcticbull 5y ago
  100M USDT yeah, USD who knows? It's 85% of trading volume. Check out the plot on Coinlib. [1] Today's USD trading volume was $193M while USDT was $5.2B. USD trading volume is a rounding error against USDT volume. 100M USD is more than 1/2 of the entire day's trading volume of BTC against real dollars. My understanding is the CFTC doesn't take Tethers. [1] https://coinlib.io/coin/BTC/Bitcoin https://coinlib.io/coin/BTC/Bitcoin

graeme 5y ago

900 Bitcoin are mined each day. If we make two assumptions we can get an estimate of how much fiat enters the markets each day: * Bitcoin mining is an efficient market and there are no profits * Bitcoin miners sell all of the bitcoin they mine These assumptions aren't exactly realistic but over the long run they should actually be close enough to the truth. Given those assumptions, at current market rates then an extra $41,121,180 has to enter the markets each day to keep prices stable, assuming buy/sell demand is otherwise equal. More than that wanting to enter, prices go up, less, prices go down. Leaving aside price manipulation by Tether, Binance etc (THIS is a big assumption, but the exercise is still valuable I think). So, the fine is only 2.5x the daily excess needed to keep prices stable. Shouldn't have a giant effect. (You may wonder, if no profits, what are the miners doing? Essential the bitcoin network is an organized effort to take capital, acquire coal, and burn it. Contrary to "store of value" claims, literally all money invested into bitcoin either gets burned up, or goes to pay someone who entered bitcoin previously. It's an entirely negative sum game, with guaranteed capital losses in aggregate. However, this added $100 million is not a meaningful amount in view of the actual scale of energy burnt each year to run the network. It might be a meaningful amount of Bitmex's capital, but likely this won't wreck them on its own.)

mdoms 5y ago
Your post assumes that there's no manipulation of the market occurring, an assumption we know to be false.
- csomar 5y ago
  I don’t think the miners can manipulate their energy bill, salaries, rent, hardware costs, etc…
  - Clewza313 5y ago
    The OP's assumption was that $42M in fiat has to enter every day to keep prices stable. Manipulation can definitely keep prices stable without a net fiat inflow... until one day it can't, because as you note the bills have to be paid in fiat, not Tether etc.

felixbraun 5y ago

They have $1.7b in the insurance fund and take in $300-500m / yr (easy calculation if you know their fees and volume, which is known to be "real"; Bitmex is absolutely legit and it is disturbing that charges against their founders continue)

Permit 5y ago
> Bitmex is absolutely legit and it is disturbing that charges against their founders continue When you say "absolutely legit" what exactly do you mean? That they clearly have anti-money laundering programs in place? Or do you mean they are "absolutely legit" in the sense that they created a foreign entity that shouldn't be held to U.S. anti-money laundering laws?
ac29 5y ago
Legit since when? They signed a consent degree and have agreed to pay this huge fine. They are absolutely guilty of what they are accused of here - they allowed US persons to trade in violation of US futures laws. They were trying to play the "we block US IPs, therefore we block US persons" card, which is laughable enough that they were never going to fool anyone serious.
- EVa5I7bHFq9mnYK 5y ago
  Deutsche Bank pays fines of hundreds and even billions of dollars on almost monthly basis (for money laundering, fraud, currency manipulation etc). That doesn't make it not a legit bank.

ur-whale 5y ago

> $100M is a huge amount in these shallow markets. Is it? What are your sources?

arcticbull 5y ago
Coinlib says USD trading volume today was $193M vs $5.2B in 3%-backed ersatz dollars (USDT). So that's 60% of a day's entire trading volume globally. [1] https://coinlib.io/coin/BTC/Bitcoin https://coinlib.io/coin/BTC/Bitcoin
- ur-whale 5y ago
  I very much doubt the USistan racketeer will demand its dues to be paid in full the day after tomorrow. I also very much doubt that selling USD 100M worth of crypto over the course of a couple of months will have any sizable effects on the markets.
  - jkhdigital 5y ago
    Especially when you’ve got companies like Tesla buying $1.5B. All it takes is one more midsize corporate CFO getting redpilled and converting a chunk of the treasury into crypto.
    - arcticbull 5y ago
      Tesla's purchase covered about 5 weeks of miner fees. It burned up long before it was even announced.

vmception 5y ago

The markets aren't that shallow.

fuddle 5y ago

They just sponsored an Italian soccer team, so they must be doing okay. https://www.acmilan.com/en/news/articles/sponsor/2021-08-10/bitmex-joins-ac-milan-as-first-ever-sleeve-partner https://www.acmilan.com/en/news/articles/sponsor/2021-08-10/...