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Which is why the word SEGREGATED is important. Segregated means that the company can not touch that money except to return it to clients. That's law. So it can
by 323 4y ago
Which is why the word SEGREGATED is important.
Segregated means that the company can not touch that money except to return it to clients. That's law. So it can't be "someone else's money" by law. And the bank holding this segregated money is also complied by law.
https://financialit.net/blog/segregated-accounts/why-fintech-companies-are-requested-have-segregated-bank-accounts https://financialit.net/blog/segregated-accounts/why-fintech...
- ceejayoz 4y agoSegregated means they've separated customer funds and company funds. Nothing prevents them from taking $1B from a friendly (or closer, as in the Tether/Bitfinex scenario) exchange as a "customer" for a day to pad out the balance. Again, stablecoins have literally been caught doing exactly this.
- 323 4y agoYour logic applies to all US retail exchanges then, because they are no more audited than Gemini is here. No one traces every single dollar going into/outof the ETrade/Charles Schwab/... segregated accounts. So according to your logic they are all frauds. I know, I know, whatabout Tether.
- ceejayoz 4y ago> Your logic applies to all US retail exchanges then... Which is why SIPC exists. https://en.wikipedia.org/wiki/Securities_Investor_Protection_Corporation https://en.wikipedia.org/wiki/Securities_Investor_Protection... (I guarantee you Schwab undergoes full audits, not just attestations. Here's one: https://www.sec.gov/Archives/edgar/data/87634/000008763417000004/Public.pdf https://www.sec.gov/Archives/edgar/data/87634/00000876341700...)