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The only likely outcome I can see is binance taking on just a part of the rumoured $6bn hole. For example covering deposits up to $100k (or whatever number) Ea
by hmate9 4y ago
The only likely outcome I can see is binance taking on just a part of the rumoured $6bn hole. For example covering deposits up to $100k (or whatever number)
Earns goodwill and users while the size of the bill is smaller.
Not sure how it would work from a legal standpoint but unfortunately 6 billion is too much (and I had a majority of my net worth in FTX as a trader)
- Lionga 4y ago
- amanj41 4y agothe tone here is a little uncalled for.
- etrautmann 4y agoagreed - I think there's a combo of schadenfreude and "I told you so" vibes from HN, where people have been generally skeptical throughout cryptocurrency's rise in popular mindshare.
- orangepurple 4y agoI get the same feeling and shudder whenever HN has a new thread about password mangement systems. Most of the suggestions are super fragile and so many people give bad advice that will eventually result in collossal catastrophic data loss.
- isthisthingon99 4y ago> I had a majority of my net worth in FTX as a trader As a trader myself, this lesson is part of your risk management. I have multiple accounts with amounts that I wouldn't cry if they went to zero. I trade them together, and if AMP decides they hate me because I am too tall, it doesn't change my ability to trade until that issue is resolved. Edit: flagged??? huh...
- unwoundmouse 4y ago
- Satam 4y agoOP seems to be level-headed and rational, I'm pretty sure he'll be able to take the advice well. And the commenter you're replying to is sharing his thoughts in a non-judgmental way as well.
- isthisthingon99 4y agoThe implication is that I learned the same way. Memories...
- deleted 4y ago[deleted]
- SkyMarshal 4y agoWhat's AMP?
- isthisthingon99 4y agoDiscount broker, high leverage.
- w1nst0nsm1th 4y agoLike retail Forex trading platforms or CFD ? Sound legit.
- isthisthingon99 4y agoThey allow what is known as "day trading" margins on futures which is usually some small fraction of exchange margin. They have survived for a long time, doesn't mean they won't go under, but they have no qualms about exiting your position if you are going to threaten their risk.
- jacquesc 4y agoSorry to hear about your losses. Can I ask, what was the reason you favored FTX for crypto investment?
- xwolfi 4y agoHe enjoyed SBF personnal guarantees that the funds were "safu".
- alex_suzuki 4y agothat was CZ, the CEO of Binance… but I guess you knew that
- xwolfi 4y agoYes, SBF is more into funding rounds with 69 investors for 420.69 bn$, so I supposed they were into memetic all the way ...
- hmate9 4y agoYour use of memes is incorrect and it must be a great life to find satisfaction in another persons huge loss :)
- miohtama 4y agoFTX offers one of the best exchange engines and trading experience. High quality UI, APIs, etc.
- FormerBandmate 4y agoThis shows exactly why financial regulations helps tbh. If there was a crypto FDIC or SIPC, almost all funds would have been covered
- xxpor 4y agoBut if there were, no one would get away with fractional reserves (at least anywhere near the reserve requirements banks that deal with dollars have). A huge reason why the FDIC works is that the fed can always bail them out in the worst case (see also: 2008). Can't do that with crypto for obvious reasons.
- matheusmoreira 4y agoThis regulation is only necessary because these exchanges are actually banks in disguise. They're leveraging customer deposits and taking on the risk of fractional reserve banking with none of the backstops to protect them. Cryptocurrencies were meant to be used in a decentralized manner. These centralized pseudobanks are everything that's wrong with this space and I hope they do get regulated.
- xwolfi 4y agoCryptocurrencies were meant to extract value from naive anarchists. They do work.
- voidmain0001 4y agoI have to admit that I like Erik Voorhees' opinion stated here, https://open.spotify.com/episode/5a0pw6MQCOOGxjSrYTPrGj https://open.spotify.com/episode/5a0pw6MQCOOGxjSrYTPrGj, which is don't use an opaque centralized exchange but use DeFi which is transparent as it's all code that's readily available.
- paulgb 4y agoThat may be his opinion now that the market has gone to crap, but a year ago he was telling me that Bitcoin had a 1-15% yield (presumably via exactly that sort of opaque, centralized exchange, although he was coy when I brought up counterparty risk). https://twitter.com/ErikVoorhees/status/1466541326510428160 https://twitter.com/ErikVoorhees/status/1466541326510428160
- JumpCrisscross 4y ago> covering deposits up to $100k Unless Binance does this as a unilateral act of goodwill, it would be difficult for them to acquire FTX in a way that pays out to customers while stiffing lenders and shareholders.
- basch 4y agobuy a copy of their books. gift humans credits on new exchange.
- throwup 4y agoThose credits would become liabilities. By taking them on, Binance would go from solvent to insolvent, using the strict definition of "assets < liabilities". Goodwill alone won't bring the money back.
- deleted 4y ago[deleted]
- adrr 4y agoYou can stiff shareholders. They know the risk. They are getting near zero in all scenarios including buyout and liquidation. Buyout they may get some cents on the dollar and liquidation they get zero.
- LegitShady 4y agoThey will immediately be sued by shareholders. So you can stiff them and then play with them in court and see if that's cheaper. all for what? taking billions in someone else's debt? Whats the upside?
- adrr 4y agoIf they sue and block the acquisition. The company will go bankrupt and get liquidated and they get zero.
- janmo 4y agoThis would pose a huge legal and regulatory risk for Binance. There is a reason why no one is acquiring ponzi schemes.
- paulusthe 4y agoThis is why they're only trying to buy non-US operations. Binance is a fraud too; they invented the "I can use my exchange to create infinite long leverage" business model of apparently every crypto exchange.
- MacsHeadroom 4y agoBinance has never used user deposits for investing and they are leading the industry in transparent proof of funds with their open source proof of reserves protocol. I am concerned about their near new monopoly. But alleging that Binance is involved in these money printing shenanigans is simply baseless.
- UncleEntity 4y ago> I am concerned about their near new monopoly. I’d be concerned if the “last man standing”[0] wasn’t the most responsible one. You’d think we, collectively as a society, learned our lesson from the Wild Cat banking days but, nope, apparently not. [0] I do find it funny you have to use quotes around a common saying because someone will say “how do you know they identify as male?”
- lancesells 4y ago> I am concerned about their near new monopoly. But alleging that Binance is involved in these money printing shenanigans is simply baseless. Can I ask why you are concerned? That they start charging more fees? Isn't crypto decentralized where you don't need to use anyone and it doesn't matter where you live? I don't know a lot about how all this works but isn't the point of crypto that you are divorced from any sort of authority?
- paulusthe 4y agoThe question is if binance has the $$. They're doing the same exact thing FTX did, but using tether instead. They truly might not have the money to plug that hole. My guess is that binance just wants to take down a competitor. They publicly started the FTX bank run by announcing they were going to dump FTT, after all.
- bastiantower 4y agoI think you're confusing Binance, which is not directly related to Tether, with Bitfinex, which is. Binance has its own dollar based stablecoin, BUSD.
- rich_sasha 4y agoThis would expose them to legal action from the bigger, more sophisticated and deep pocketed entities. They may be exterritorial to the US. So was Silk Road. The reason partial deposit insurance works in commercial banks is that the ground rules are set from the start.
- miohtama 4y agoAll US users were driven to FTX.us that is a separate entity and never had withdrawal issues.
- zeven7 4y agoIt won't happen. They have nothing to gain from doing that.