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"Every banker knows that if he has to prove he is worthy of credit, in fact his credit is gone." - Bagehot
by pranshum 4y ago
"Every banker knows that if he has to prove he is worthy of credit, in fact his credit is gone." - Bagehot
- oldgradstudent 4y agoThey claim to be an exchange, not a bank, not investing user assets. https://twitter.com/SBF_FTX/status/1589598285798707202 https://twitter.com/SBF_FTX/status/1589598285798707202 The Bagehot quote is not SUPPOSED to apply.
- colinmhayes 4y agoDid anyone actually believe they weren't loaning out user funds? How were they funding their massive leverage programs? How were they loaning all that money to SBF's trading firm?
- matheusmoreira 4y ago> They claim to be an exchange, not a bank They're liars. They are literally banks with all of the drawbacks and none of the benefits. They do fractional reserve banking with user deposits.
- oldgradstudent 4y agoI'm not sure why you are ruling out a Ponzi scheme so quickly.
- matheusmoreira 4y agoI don't think a Ponzi scheme adequately explains the problems with centralized cryptocurrency exchanges. They're just banks. There are plenty of scammers in this space, I just don't think Binance is one of them. The problem is they leverage user deposits as gambling money. These corporations can't bear to watch a pile of money sitting around doing nothing while in their custody. They just need to loan it out.