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Mass of transactions leaving crypto.com wallets

281 points by thm 4y ago

dehrmann 4y ago
Wait, Shiba Inu and Dogecoin aren't the same thing?
- ackbar03 4y ago
  They are. If you give me 1 dodgecoin I'll give you 2 shiba inu back. Lets do this.
  - mfkp 4y ago
    Joke's on you, you're getting dodgecoin instead of dogecoin
    - kleene_op 4y ago
      Before or after the rug pull?
- 29athrowaway 4y ago
  They are not. Dogecoin is the original.
- echelon 4y ago
  Dogecoin (DOGE) was created in 2013 as a joke. It has occasionally seen its price surge as a result of memes and Elon Musk pumping it. Shiba Inu (SHIB) was created in mid-2020 as a lookalike cash grab on the then-surging Dogecoin. It was shilled heavily on Twitter and across social media. Ads attempted to confuse would-be investors looking to buy Dogecoin. For some reason or another it maintains a modest market cap. The success of Shib spawned countless more lookalikes, eg. Baby Shiba Inu, etc. https://en.wikipedia.org/wiki/Dogecoin https://en.wikipedia.org/wiki/Dogecoin https://en.wikipedia.org/wiki/Shiba_Inu_(cryptocurrency) https://en.wikipedia.org/wiki/Shiba_Inu_(cryptocurrency)
laluser 4y ago
Regardless, what has been happening and pointed out is not even an inconsistency - it's a huge red flag. This week we'll see more players go bankrupt or run away with even more money as the fallout from FTX is yet to propagate everywhere. Truly fascinating to watch from the sidelines.
- revskill 4y ago
  What is FTX ? First time hear about it. I only care if bittrex, bitmex or binance got any problem.
  - yieldcrv 4y ago
    the solution isn't to use a different company exchange, its to go on-chain directly..... any company exchange that is not lending customer assets will function completely fine during a bank run even if 100% of assets are withdrawn in quick succession, nobody should have anything to worry about ever, but so far these are mismanaged companies with poor collateral choices for their creditworthiness. many crypto skeptics only see headlines when things go wrong, but many people that use crypto regularly know that there are plenty of exchanges and services that have had 100% withdrawals just fine, something that would be called a "stress test" on poorly run services or a "black swan" in the traditional banking world. these big ones from the last cycle got hooked on leverage, the ones that didn't will be fine as long as they stick to just running an exchange instead of additional overhead.
    - zinodaur 4y ago
      > the solution isn't to use a different company exchange, its to go on-chain directly..... i'm a crypto noob - this is what i've been wondering - isn't the point of crypto that you can participate in these transactions directly without trusting an intermediary? why do people use exchanges?
      - yieldcrv 4y ago
        the main point is familiarity, when trading other kinds of assets, the exchange is the destination. you buy it, and keep your assets there. deeeeep down the exchanges keep a hotline for you to ask for your share certificates or physical commodities, but they make it very hard, and when you get them you can't do anything with them easily. with crypto, the exchanges are just part of the journey and your wallet is the destination, it is very easy to get your crypto and there is an ever expanding set of things you can do with your crypto easily. people chose not to get familiar with that because its simply not the same user experience ("hard" wouldn't be the word I would use, just unfamiliar) and because they weren't there to use crypto at all, only attempt to profit from a delta in price differences or managed staking where the company lies about how much they are earning from staked assets and gives a little less to the user. people chose to learn or lose their funds. pretty simple. when it comes to "hard" versus unfamiliar, it will just be different people that chose to be crypto natives and self-custody and use on-chain services. its the same with every other advancement, there are still people that don't use ATMs and don't trust them due to the new problems that arise from their existence. there are still people that don't use discount brokerage firms because they are more familiar with calling their broker, computers are hard and they don't trust their money on the internet or services on the internet. its the same with crypto: nobody can stop you from becoming your parents, can't blame the user experience on everything.
narush 4y ago
(Not necessarily on-topic, but highly-relevant and educational!) For anyone interested in understanding the dynamics behind bank runs, the Diamond–Dybvig model [1] is worth reading. It describes a very simplified situation where due to banks short-term liabilities and long-term assets, a bank run is a valid Nash equilibrium. I think they won a Nobel prize for this model. There’s also some very interesting discussion at the end about preventing runs: first if banks can suspend withdrawals, and second through central bank backing. I’ll avoid summarizing it because I’m too dumb — but to quote: “Deposit insurance provided by the government allows bank contracts that can dominate the best that can be offered without insurance and never do worse.” [1] https://www.bu.edu/econ/files/2012/01/DD83jpe.pdf https://www.bu.edu/econ/files/2012/01/DD83jpe.pdf
- panphora 4y ago
  The problem with suspending withdrawals for crypto firms is the market interprets it as your exchange is insolvent (as that has usually been the case so far). This will crash markets (lowering your liquidity even more) and make people want to withdraw even more once you reopen. The situation is made worse because a lot of exchanges issue their own token: CRO in Crypto.com's case. This token provides extra liquidity to your exchange, sometimes in the billions (on paper at least), that you can borrow against. The moment you mention pausing withdrawals, your custom token will crash to the ground and you'll lose a lot of potential liquidity (See Terra/LUNA & FTC/FTT).
  - dragontamer 4y ago
    CRO crashed yesterday. Crypto.com's ability to raise money from CRO is much much less, and possibly non-existant now...
  - dragonwriter 4y ago
    > The problem with suspending withdrawals for crypto firms is the market interprets it as your exchange is insolvent That’s a problem with suspending withdrawals, especially by individual institutions, generally, I think, which is one reason why government deposit insurance is the better solution, in practice. Even the 1933 Bank Holiday in the US, a government-declared suspension of banking, probably only succeeded because the government established temporary emergency deposit insurance during the break.
panphora 4y ago
A lot of users on Twitter and Reddit are reporting delays of 6-8 hours when processing withdrawals. But it looks like some/most? are eventually processed. The CEO of Crypto.com has been doing damage control all day on Twitter. He's doing a livestream AMA on Youtube at 2AM EST. https://www.youtube.com/watch?v=SQeqdR_nbNY https://www.youtube.com/watch?v=SQeqdR_nbNY
- yieldcrv 4y ago
  one of the hot wallets keeps running out of ether gas to send the transactions, people are sending it ether and withdrawals are processed automatically pretty hilarious
  - Ekaros 4y ago
    Ah the future of money. Bank can't give you your money because one of their accounts don't have enough money to pay for the transaction.
    - yieldcrv 4y ago
      I mean thats current money too, banks are expected to not have enough on hand to pay out all at once Crypto exchanges operate on a cold storage concept, how fast they can get their cold storage to their hot wallet is always a mystery each wallet having many kinds of assets, instead of just a single asset (your local currency), instead of man hours to move those esoteric assets they just need a little transaction fee there are a lot of ways to improve this operational experience, that this exchange just didn’t do, so even as a joke it relies on perpetuating ignorance to discredit an entire concept
      - bombcar 4y ago
        FDIC has procedures for that type of bank run - company called WDTC has armored semis ready to go, FDIC can ring them up and they can move truckloads of literal cash to banks across the country. Last time they were activated was in 2008 - supposedly there’s video somewhere. https://www.wdtc.net/armored.shtml https://www.wdtc.net/armored.shtml FDIC’s main responsibility is to avoid bank runs and they have many tools beyond taking banks like WAMU into receivership.
sillysaurusx 4y ago
If you’re seeing delays, get out now. Don’t think about it. Pull as much money as possible, out, now. The exact same thing happened at Gox. I did all kinds of mental rationalizations. Oh, they’re too big. Oh, failure was unlikely. I managed to siphon out 7 BTC. Then I traded it 2:1 with some fellow from IRC for his BTC locked up in Gox. Woo, I was going to make a 14 BTC payday. Nope. In fact, trading was still open on the exchange. I took a risk with that goxcoin. When the dust settled, I was left with 7.76 BTC that I couldn’t access. It’s still there. That was almost 10 years ago. Don’t make my mistake. The very first sign that there was a problem was delays, followed by transactions over a certain amount not processing. People seem to be reporting both.
- scoofy 4y ago
  Am I watching a bank run in real time?
  - autokad 4y ago
    you are seeing a chapter in the history books in real time. like Enron stuff
    - pjc50 4y ago
      The closest real world analogy is probably https://en.wikipedia.org/wiki/MF_Global https://en.wikipedia.org/wiki/MF_Global : same story of illegally transferred client funds from what should have been a plain custodial brokerage.
  - djbebs 4y ago
    Exchanges cannot get bankrun on. What you're watching is fraud being revealed.
    - solumunus 4y ago
      Of course they can if they're running on fractional reserves AKA fake liquidity. I don't think there is any regulation against them doing that.
kache_ 4y ago
listen i hate to say it but not your keys not your crypto
krono 4y ago
News that SHIB makes up nearly 20% of their asset reserves[1] Big asset movements between Crypto.com and Gate just in time for a proof of reserves disclosure[2] CEO trying increasingly hard to convince everyone not to panic Can't blame these people, really. 1: https://www.coindesk.com/markets/2022/11/11/cryptocom-preliminary-audit-shows-that-20-of-its-assets-are-in-shiba-inu-coin/ https://www.coindesk.com/markets/2022/11/11/cryptocom-prelim... 2: https://twitter.com/shegenerates/status/1591645956767883264 https://twitter.com/shegenerates/status/1591645956767883264
- mywaifuismeta 4y ago
  Maybe I'm missing something but is it a problem if SHIB is 20% of their reserves if 20% of what users are keeping on the exchange is SHIB? Of course we don't want what people actually deposited since it's a centralized exchange with no transparency. But by itself this isn't really a red flag...
  - krono 4y ago
    Yes, it's yet another potentially destabilising factor you can add to the pile though.
    - runeks 4y ago
      How is it destabilizing? If 20% of depositor funds are SHIB then 20% of reserves should be SHIB.
      - blitzar 4y ago
        As far as I am concerned, if they have 90% of their reserves in literal dog shit that is fine IF their liabilities are also in dog shit. I wouldnt pay $10,000 a turd, but that is my value judgement, if someone else does then their problem.
      - krono 4y ago
        > How is it destabilizing? Potentially destabilising is what I said. In a similar fashion to how 20% of my diet consisting of Taco Bell would carry a greater destabilising potential than a the same share of FDA recommended diet conforming home-cooked meals would. > If 20% of depositor funds are SHIB then 20% of reserves should be SHIB. You're the one bringing this up, not me. Not refuting it though.
paulpauper 4y ago
and there goes 16k. Probably going back to 3k or lower soon. Why would anyone buy crypto at this point? Stick with index funds, imho . I have never seen anything hyped so much that sucks so much. It's like if someone wanted to invent a way for as many people as possible to lose as much money as possible, that would be crypto. People getting burned by plunging prices, corrupt exchanges, and scams.
- deleted 4y ago
  [deleted]
- wruza 4y ago
  going back to 3k or lower soon. Why would anyone buy crypto at this point? You’re underestimating people’s 5k fomo ptsd, imo. I definitely have one and will think twice before not buying in again.
- lupire 4y ago
  Index funds means buying stock in every fraudulent company on the market, and inflating the price of merely decent companies. It's freeloading off of real investors doing intelligent capital allocation, and it's going to come crashing down.
tgtweak 4y ago
Why can't exchanges operate without putting customers funds at risk and leveraging crypto for collateral... Seems silly buy is there no exchange that is happy to just make a transaction fee?
- Gigachad 4y ago
  Because everyone in the crypto space is a scammer or a moron.
  - radicaldreamer 4y ago
    Coinbase seems to be the exception here
    - pavlov 4y ago
      Coinbase has racked up $2 billion in losses for 2022 already, so I’m not sure about the “not morons” part. At this rate a bankruptcy is not out of the question.
      - radicaldreamer 4y ago
        That loss is due to R&D and headcount spend though, they're not using customer funds to make crypto bets.
        papa-whisky 4y ago
        I think the point is that coinbase is struggling to compete when there are tons of exchanges out there offering low/no fees and ludicrous interest payments on coins kept on the exchange. Even if those other 'exchanges' do all seem to be turning out to be ponzi schemes... For whatever reason people keep flocking to the next one.
        deleted 4y ago
        [deleted]
gonzo41 4y ago
I may be a few days early, but I think it's the beginning of the end for crypto. It's going to burn a lot of people. Trust will never be restored.
- simsspoons 4y ago
  Or maybe it’s the beginning of the end for centralized exchanges
  - smt88 4y ago
    Then it's also the end of crypto as a consumer product. Centralized exchanges offered a ton of usability and monetary incentives that brought people into crypto. Trying to rebuild a user base without those things will essentially be impossible. Even during the days of free money in 2021, the full crypto user base wasn't huge. With high interest rates, tons of fraud in the rearview mirror, and enormous obstacles to usage, the community will be a tiny fraction of even its previous tiny fraction of traditional banking customers.
  - tsimionescu 4y ago
    Is there any real alternative for money (dollars) to make it into and out of the system, at large scale?
    - ac29 4y ago
      Stablecoins
      - tsimionescu 4y ago
        How exactly will you turn 1USD into 1USDT or 1USDC or vice-versa without opening an account with a centralized exchange?
      - europeanguy 4y ago
        Stablecoins are great. Personally I recommend USD.
davidkuennen 4y ago
And Tether is struggling hard to stay alive: https://coinmarketcap.com/currencies/tether/ https://coinmarketcap.com/currencies/tether/
- jbm 4y ago
  It's .9987, and on an upward trajectory over the past month. (Disclaimer: Own no crypto, believe Tether is suspicious, etc..)
anonymoushn 4y ago
crypto dot com CEO Kris Marszalek has posted earlier today that his exchange has regularly sent twenty million dollars or more to other exchanges to hedge exposure gained by trading against its customers. crypto dot com CEO Kris Marszalek does not seem to understand that he has confessed to several crimes and that customers who deposit dollars at an exchange expect that they have claims against a boring business that custodies funds and collects fees, not claims against an exciting business that regularly assumes twenty million dollars of directional risk by selling customers tokens they do not physically have and then buying them somewhere else later. Here is crypto dot com CEO Kris Marszalek's confession: https://twitter.com/kris/status/1591928306097868800 https://twitter.com/kris/status/1591928306097868800 crypto dot com CEO Kris Marszalek also does not seem to understand that this is a particularly bad time to tell his customers that he is an incompetent criminal who is constantly trading against them with funds he does not have and misappropriating their deposits because less than a week ago customers of a different exchange lost 10 billion dollars in a similar situation.
- artdigital 4y ago
  > to hedge exposure gained by trading against its customers This is not how hedging works and he also explains this in a subsequent tweet: https://twitter.com/kris/status/1591928970693726211 https://twitter.com/kris/status/1591928970693726211 It's not "trading against it's customers" and very common practice with basically all exchanges to make sure liquidity is always there
  - anonymoushn 4y ago
    If the exchange is not trading against its customers, and it is only custodying customer funds and collecting fees, how does it regularly acquire 20 million dollars of shitcoin exposure? Here's one way a crypto exchange could work: - many users deposit coins and fiat - some of those users are market makers - the users trade with each other - the exchange just custodies the coins and fiat and collects fees - the exchange does not need to send customer funds to another exchange because it is not assuming twenty million dollars of directional risk Can you explain your understanding of how it should work instead? Can you explain why people with these roles work at an exchange, an entity that does not engage in systematic trading or take on any nonzero amount of directional risk ever? https://www.linkedin.com/in/chen-x-74a83322/ https://www.linkedin.com/in/chen-x-74a83322/ https://www.linkedin.com/in/wanghan https://www.linkedin.com/in/wanghan https://www.linkedin.com/in/nicolasbourdrez/ https://www.linkedin.com/in/nicolasbourdrez/ https://www.linkedin.com/in/ronaldyiap/ https://www.linkedin.com/in/ronaldyiap/ https://www.linkedin.com/in/ernest-lim-88529b135/ https://www.linkedin.com/in/ernest-lim-88529b135/ https://www.linkedin.com/in/pravin-pathmanathan/ https://www.linkedin.com/in/pravin-pathmanathan/ https://www.linkedin.com/in/jin-marcus-wang/ https://www.linkedin.com/in/jin-marcus-wang/ https://www.linkedin.com/in/calen-zeng-b3324a196/ https://www.linkedin.com/in/calen-zeng-b3324a196/ https://www.linkedin.com/in/zzhuaj/ https://www.linkedin.com/in/zzhuaj/ https://www.linkedin.com/in/yining-liu-763a5041/ https://www.linkedin.com/in/yining-liu-763a5041/ https://www.linkedin.com/in/yu-tao-930721/ https://www.linkedin.com/in/yu-tao-930721/ https://www.linkedin.com/in/tom-chan-812b4090/ https://www.linkedin.com/in/tom-chan-812b4090/ https://www.linkedin.com/in/mark-amsellem-71a1a132/ https://www.linkedin.com/in/mark-amsellem-71a1a132/ https://www.linkedin.com/in/oliver-jieren-jia-636166b6/ https://www.linkedin.com/in/oliver-jieren-jia-636166b6/ Can you explain why they are hiring for these HFT/systematic trading roles? https://www.linkedin.com/jobs/view/3262469829/ https://www.linkedin.com/jobs/view/3262469829/ https://www.linkedin.com/jobs/view/3254166615/ https://www.linkedin.com/jobs/view/3254166615/ https://www.linkedin.com/jobs/view/3104863804/ https://www.linkedin.com/jobs/view/3104863804/ Thanks.
Animats 4y ago
From the article: "after it was revealed that multiple exchanges may have been “sharing” funds to post ‘Proof of Reserves’." This is a good time to re-read Tether's "asset assurance consolidated reserves report" for USDT. "The Management of the Company asserts the following as of 31 March 2022 at 11:59 PM UTC: ... The Group’s consolidated assets exceed its consolidated liabilities. The Group’s consolidated reserves held for the digital tokens issued exceeds the amount required to redeem the digital tokens issued. ... The reporting date is limited to a point in time as of 31 March 2022 at 11:59 PM UTC." So, there was a moment in time when Tether was fully backed. But the accounting firm explicitly states that their opinion applies only to that moment. One wonders what the situation was the next day. Tether says their reserves, as of that date, included $20,096,579,998 in "commercial paper". But whose commercial paper? It's known that Tether's transactions don't show up in the usual commercial paper markets. Money is being pulled out of Tether (USDT) in big transactions. US$3 billion in the last 3 days. None of this is definitive. But it would be a good time to get out of Tether. There's no upside, after all, and there is a downside. [1] https://assets.ctfassets.net/vyse88cgwfbl/1np5dpcwuHrWJ4AgUgI3Vn/e0dac722de3cea07766e05c52773748b/Tether_Assurance_Consolidated_Reserves_Report_2022-03-31__3_.pdf https://assets.ctfassets.net/vyse88cgwfbl/1np5dpcwuHrWJ4AgUg...
- mudrockbestgirl 4y ago
  Binance is not the issuer of USDT.
- lend000 4y ago
  > Binance is the issuer of USDT Surely you mean Bitfinex.
  - Animats 4y ago
    Right, sorry. Edited parent post to fix.
- ceejayoz 4y ago
  Tether's assurances should always be read with this in mind. https://ag.ny.gov/press-release/2021/attorney-general-james-ends-virtual-currency-trading-platform-bitfinexs-illegal https://ag.ny.gov/press-release/2021/attorney-general-james-... > In the face of persistent questions about whether the company actually held sufficient funds, Tether published a self-proclaimed ‘verification’ of its cash reserves, in 2017, that it characterized as “a good faith effort on our behalf to provide an interim analysis of our cash position.” In reality, however, the cash ostensibly backing tethers had only been placed in Tether’s account as of the very morning of the company’s ‘verification.’ > On November 1, 2018, Tether publicized another self-proclaimed ‘verification’ of its cash reserve; this time at Deltec Bank & Trust Ltd. of the Bahamas. The announcement linked to a letter dated November 1, 2018, which stated that tethers were fully backed by cash, at one dollar for every one tether. However, the very next day, on November 2, 2018, Tether began to transfer funds out of its account, ultimately moving hundreds of millions of dollars from Tether’s bank accounts to Bitfinex’s accounts. And so, as of November 2, 2018 — one day after their latest ‘verification’ — tethers were again no longer backed one-to-one by U.S. dollars in a Tether bank account.
oefrha 4y ago
> Crypto.com currently have around US$2.5 billion in reserve on the platform, with more than 20% of that number being comprised by Shiba Inu token (SHIB). Geez, isn’t that a dogecoin knockoff meme coin? Guess you can now become a crypto billionaire on the back of a knockoff of a meme. What a strange world we live in.
- ChainOfFools 4y ago
  And Dogecoin itself was created as a joke, the developer stated that took him about 2 hours, including the logo, throw together. its literally nothing more than a copy-paste of another coin (itself a 95% identical copy of bitcoin) with a few irrelevant cosmetic changes and a deliberately absurd emission rate setting. The point of Dogecoin was to mock how ridiculous the "sound money" narrative of cryptocurrency is by showing how easily more - infinitely more - of it could be created with almost zero efforr, and nobody seemed to care to do the least bit of common sense research before ithrowing real money into it.
  - vanattab 4y ago
    >The point of Dogecoin was to mock how ridiculous the "sound money" narrative of cryptocurrency is by showing how easily more - infinitely more - of it could be created with almost zero efforr, and nobody seemed to care to do the least bit of common sense research before ithrowing real money into it. I am no fan of crypto but that is non different then any fiat money no? In fact dodge at least has some sort of rate limit where fait system have non.
    - Gigachad 4y ago
      That’s the point it makes. That crypto is not limited because anyone can make a new coin any time they want. While crypto zealots will insist that bitcoin is inherently valuable because you can’t create more. But being limited has no inherent value.
    - arlcode 4y ago
      Central banks, indirectly, can force people to use their currency (e.g. for taxes) and actively make decisions to try to follow a deliberate financial policy. Their states command economic, diplomatic or military power which they often use to protect and develop their economies and the associated currencies. Often the decision makers are accountable in the form of elections and rule of law. Crypto on the other hand is purely market driven and free floating. It's very easy for bad actors to manipulate the currency itself rapidly, something that does not happen to Dollars or Euros. Cryptobros and others disagree whether anything outside of fully unregulated market forces is a good thing.
bandrami 4y ago
It's really kind of fun to watch people rediscover why we have bank regulations in real time.
edf13 4y ago
Meanwhile - the UK government has a £58 billion hole on their finances…
- onlyrealcuzzo 4y ago
  Meanwhile, the UK government provides countless services to its 68M citizens and has claims to their future taxes. What's your point?
abrookewood 4y ago
This is just crazy: "Crypto.com “Accidentally” Transfers $400M to the Wrong Wallet" [0]. How is that sort of mistake even possible? [0] https://thechainsaw.com/defi/crypto/crypto-com-accidentally-transfers-400m-to-rival-exchange/ https://thechainsaw.com/defi/crypto/crypto-com-accidentally-...
- pjc50 4y ago
  No safety rails. Crypto is an unconfirmed transaction system that does not require confirmation from the recipient. At least in this case they were able to get it back, it's trivial to transfer crypto to a wallet to which nobody has the password and it's forever unrecoverable. (If I were designing one of these things, which I am not, I would make a transaction payee-initiated, like the issuing of an invoice which the payer signs)
- chinathrow 4y ago
  Not defending crypto in any form or this dumb move but that has happened before in traditional banking as well. https://www.whio.com/news/trending/50-billion-accidentally-deposited-louisiana-familys-bank-account/CCD22N6WMNGU3INCIVIET42LEM/ https://www.whio.com/news/trending/50-billion-accidentally-d...
  - dncornholio 4y ago
    Accidentally moving money to a wrong account, sure.. mistakes happen. But in this case, it was during a reserve audit.. and the address was of a 'whitelisted' exchange. This brings suspicions crypto wallets are covering their asses, that they share currencies to proof false customer reserves..
  - abrookewood 4y ago
    Yes, you're right, that's worth pointing out. Both instances are mind boggling.
artdigital 4y ago
At this point I am convinced this is just mass hysteria, and picking on CDC is the trend of the day. The amount of FUD is through the roof, everyone is scared of losing money, which makes sense and it's definitely the smart move to withdraw and wait until the dust settles. Personally, I reckon they'll be fine. Crypto.com has been playing nicely with regulations and did the right business decisions (downsizing, reducing of rewards) at the right time. They are in my eyes one of the most regulated and "playing by the books" exchange out there, but yes time will tell. So far I've not seen any arguments of them actually doing anything wrong, just the echo chamber about "funds are leaving Crypto.com, so you should do too", including in this thread here. If the proof of reserves that they published holds up, this should be no problem for them to overcome. RE: the constant argument that 20% of their asset reserves are in SHIB - this is not CDC making investments in SHIB, but users buying SHIB and having it in their wallet. Says more about the userbase as a whole than it does about CDC who only enables it /EDIT: the CEO had an AMA on YT just now that goes into a lot of the points I mentioned: https://www.youtube.com/watch?v=SQeqdR_nbNY https://www.youtube.com/watch?v=SQeqdR_nbNY
- shawabawa3 4y ago
  Do you realise they publicly admitted to sending $400m of Ethereum from cold storage to another exchange "by accident" That means at best their internal processes are terrible
  - b4je7d7wb 4y ago
    Are you implying they didn't learn anything from that?
    - ceejayoz 4y ago
      I think they're implying they should've learned that lesson much earlier with much smaller amounts, and that if they haven't by now, you should assume they won't ever.
  - artdigital 4y ago
    Obviously that wasn't so great and I'm not happy with that either What Kris said in the AMA was something along the lines: Whitelisted addresses where funds can get sent to are heavily controlled, and no matter where it went by accident, all whitelisted addresses are at places that can be 100% retrieved again
deleted 4y ago
[deleted]
jbverschoor 4y ago
Doesn’t that mean there’s more demand for eth right now?
zeroclip 4y ago
Another reason not to depend on CEXes. Real end game for crypto is DeFi and DEXes, not a shady company with a marketing team.
SirChainsaw 4y ago
Has anyone managed to get their/any BTC off Crypto.com in the last few hours? I got my ETH and some other tokens off easily enough but I've been waiting ~18 hours now for the BTC to arrive :s.
- benjaminwootton 4y ago
  I switched BTC and other coins to ETH and then pulled ETH to Coinbase. Probably lost some on the trades but wanted to get out as efficiently as possible. It took about 6 hours to settle. I do think there has been lots of FUD about crypto.com such as moving money into their own wallet and back, but do feel I would sleep better at night with funds in Coinbase.
londgine 4y ago
what is the benefit to leaving crypto in a wallet held by another party. I guess they could lower the transition fees when transferring from one wallet to another on their platform. and if you forget your password, they may make it easier to recover. but is that all the benefit?
Renaud 4y ago
The problem might be different here, but all the exchanges I have used have ended up dead, and I consider myself very lucky not to have lost everything I had. First there was MtGox where I happily sold BTC and then waited weeks for a bank transfer that never came. I was lucky to be able to re-purchase some of the BTC (at a loss) and transfer them out. That was just a few weeks before MtGox fell. Then there was ANX/ANXPro. Everything was fine for a while. Over time, they ceased trading and at some point app and website stopped being functional. I had left some crypto there, at time it wasn't worth much. I panicked once the value shoot up and I couldn't find a way to recover them. Fortunately, I had chosen ANX because they were local. I went to the listed address there in person, expecting it to be closed. I found the place, it was nondescript, no sign, no-one in sight. I was shaking when I pressed the bell and a guard came to answer. Fortunately, the company was still running in some fashion. There was a counter and I was able to transact my crypto out. Had I not been local, I would have probably lost it all. Then there was FTX... I traded cautiously last year for a little while, never leaving too much for too long, then decided that crypto was all too nerve-wracking for me and sold everything I had. Probably the best thing I ever did. I have friends who lost big in the FTX debacle and will probably never recover a dime. The morale of the story is that I wouldn't trust ANY exchange. They move so much money that the temptation is too great not to use it for something else. Despite claims, I don't trust any to have the structure and oversight necessary to avoid misusing funds that don't belong to them.
- aborsy 4y ago
  Can’t you use an exchange, keeping your money offline (eg, in an hardware wallet) and just authorize the required amount out and in, in real time?
  - pjc50 4y ago
    Not in "real time": blockchain settlement has to wait for a block. And you incur on-network transaction fees plus whatever fee the exchange imposes for transfers out. (Besides, many people are "day trading" on these exchanges because it's a form of addictive gambling) Oh and then there's "staking": https://ftx.com/staking https://ftx.com/staking which encourages people to keep tokens on the exchange by pretending to pay them interest rates. And offering various other multi-level-marketing incentives. I see "Free Daily ERC20/ETH Withdrawals : NaN" on that page, which is fun.
xch 4y ago
If you don’t live binance or still holding $BNB i just want to wish you good luck
brettermeier 4y ago
I really enjoy seeing Crypto-Bros burn! :D
NohatCoder 4y ago
The really easy observation to make is that crypto.com is operating at a massive deficit. Their advertising budget is absurdly large, and then they pay some hefty interests to their customers. Is there any part of the business that actually make money for them? Because it seems like all they do is loan more money to keep the Ponzi scheme going.
olodus 4y ago
Isn't it the case that as long as these exchanges keep acting so bank-like (holding on to people's keys, possibly using them for trading or fractional trading or what you would call it) they will keep having these problems since crypto is so prone to "bank"-runs. There are no real reason for any of their customers to keep their money with them as soon as there is even a hint of suspicion of illiquidity or insolvency. In real banking you a lot of the time atleast need to go and take your money out but in the crypto currency world that can be automated. I feel like the only real way they could be run while avoiding this to only work as a broker to make dealto purchase coins available to users and possibly also sell a wallet software or something that is mostly a frontend and no keys/money is kept with them. Then they are only ever able to trade on the exchange fees and purchase money for the wallets they get. But I guess such a reasonable way to run a buisness is no way to get filthy rich...
lvl102 4y ago
People really have to stop using these exchanges to store EVERYTHING. Do you not see that it defeats the whole purpose of crypto?
davidgerard 4y ago
The run on crypto.com has hit Sky News, Reuters, AFP and Bloomberg. Withdrawals are still open. I believe Binance was doing some bailing-out.
freddealmeida 4y ago
They should. Not your keys, not your coins.
misja111 4y ago
Meanwhile, BTC price has gone up today. I guess this makes sense when it's only possible to deposit.
- lupire 4y ago
  It's not up for sellers, only for buyers.
pibechorro 4y ago
Unless you are a professional daily trader, keeping any large amount of funds in a 3rd party exchange is reckless behavior.. before and after ftx. Since the caveman days, not your keys, not your coins.
rejectfinite 4y ago
God I love seeing crypto chuds lose "money"
shapefrog 4y ago
In 6-12 months time there will be the inevitable spike in "I lost my crypto keys and lost all my money".

281 points by thm 4y ago

dehrmann 4y ago

Wait, Shiba Inu and Dogecoin aren't the same thing?

ackbar03 4y ago
They are. If you give me 1 dodgecoin I'll give you 2 shiba inu back. Lets do this.
- mfkp 4y ago
  Joke's on you, you're getting dodgecoin instead of dogecoin
  - kleene_op 4y ago
    Before or after the rug pull?
29athrowaway 4y ago
They are not. Dogecoin is the original.
echelon 4y ago
Dogecoin (DOGE) was created in 2013 as a joke. It has occasionally seen its price surge as a result of memes and Elon Musk pumping it. Shiba Inu (SHIB) was created in mid-2020 as a lookalike cash grab on the then-surging Dogecoin. It was shilled heavily on Twitter and across social media. Ads attempted to confuse would-be investors looking to buy Dogecoin. For some reason or another it maintains a modest market cap. The success of Shib spawned countless more lookalikes, eg. Baby Shiba Inu, etc. https://en.wikipedia.org/wiki/Dogecoin https://en.wikipedia.org/wiki/Dogecoin https://en.wikipedia.org/wiki/Shiba_Inu_(cryptocurrency) https://en.wikipedia.org/wiki/Shiba_Inu_(cryptocurrency)

laluser 4y ago

Regardless, what has been happening and pointed out is not even an inconsistency - it's a huge red flag. This week we'll see more players go bankrupt or run away with even more money as the fallout from FTX is yet to propagate everywhere. Truly fascinating to watch from the sidelines.

revskill 4y ago
What is FTX ? First time hear about it. I only care if bittrex, bitmex or binance got any problem.
- yieldcrv 4y ago
  the solution isn't to use a different company exchange, its to go on-chain directly..... any company exchange that is not lending customer assets will function completely fine during a bank run even if 100% of assets are withdrawn in quick succession, nobody should have anything to worry about ever, but so far these are mismanaged companies with poor collateral choices for their creditworthiness. many crypto skeptics only see headlines when things go wrong, but many people that use crypto regularly know that there are plenty of exchanges and services that have had 100% withdrawals just fine, something that would be called a "stress test" on poorly run services or a "black swan" in the traditional banking world. these big ones from the last cycle got hooked on leverage, the ones that didn't will be fine as long as they stick to just running an exchange instead of additional overhead.
  - zinodaur 4y ago
    > the solution isn't to use a different company exchange, its to go on-chain directly..... i'm a crypto noob - this is what i've been wondering - isn't the point of crypto that you can participate in these transactions directly without trusting an intermediary? why do people use exchanges?
    - yieldcrv 4y ago
      the main point is familiarity, when trading other kinds of assets, the exchange is the destination. you buy it, and keep your assets there. deeeeep down the exchanges keep a hotline for you to ask for your share certificates or physical commodities, but they make it very hard, and when you get them you can't do anything with them easily. with crypto, the exchanges are just part of the journey and your wallet is the destination, it is very easy to get your crypto and there is an ever expanding set of things you can do with your crypto easily. people chose not to get familiar with that because its simply not the same user experience ("hard" wouldn't be the word I would use, just unfamiliar) and because they weren't there to use crypto at all, only attempt to profit from a delta in price differences or managed staking where the company lies about how much they are earning from staked assets and gives a little less to the user. people chose to learn or lose their funds. pretty simple. when it comes to "hard" versus unfamiliar, it will just be different people that chose to be crypto natives and self-custody and use on-chain services. its the same with every other advancement, there are still people that don't use ATMs and don't trust them due to the new problems that arise from their existence. there are still people that don't use discount brokerage firms because they are more familiar with calling their broker, computers are hard and they don't trust their money on the internet or services on the internet. its the same with crypto: nobody can stop you from becoming your parents, can't blame the user experience on everything.

narush 4y ago

(Not necessarily on-topic, but highly-relevant and educational!) For anyone interested in understanding the dynamics behind bank runs, the Diamond–Dybvig model [1] is worth reading. It describes a very simplified situation where due to banks short-term liabilities and long-term assets, a bank run is a valid Nash equilibrium. I think they won a Nobel prize for this model. There’s also some very interesting discussion at the end about preventing runs: first if banks can suspend withdrawals, and second through central bank backing. I’ll avoid summarizing it because I’m too dumb — but to quote: “Deposit insurance provided by the government allows bank contracts that can dominate the best that can be offered without insurance and never do worse.” [1] https://www.bu.edu/econ/files/2012/01/DD83jpe.pdf https://www.bu.edu/econ/files/2012/01/DD83jpe.pdf

panphora 4y ago
The problem with suspending withdrawals for crypto firms is the market interprets it as your exchange is insolvent (as that has usually been the case so far). This will crash markets (lowering your liquidity even more) and make people want to withdraw even more once you reopen. The situation is made worse because a lot of exchanges issue their own token: CRO in Crypto.com's case. This token provides extra liquidity to your exchange, sometimes in the billions (on paper at least), that you can borrow against. The moment you mention pausing withdrawals, your custom token will crash to the ground and you'll lose a lot of potential liquidity (See Terra/LUNA & FTC/FTT).
- dragontamer 4y ago
  CRO crashed yesterday. Crypto.com's ability to raise money from CRO is much much less, and possibly non-existant now...
- dragonwriter 4y ago
  > The problem with suspending withdrawals for crypto firms is the market interprets it as your exchange is insolvent That’s a problem with suspending withdrawals, especially by individual institutions, generally, I think, which is one reason why government deposit insurance is the better solution, in practice. Even the 1933 Bank Holiday in the US, a government-declared suspension of banking, probably only succeeded because the government established temporary emergency deposit insurance during the break.

panphora 4y ago

A lot of users on Twitter and Reddit are reporting delays of 6-8 hours when processing withdrawals. But it looks like some/most? are eventually processed. The CEO of Crypto.com has been doing damage control all day on Twitter. He's doing a livestream AMA on Youtube at 2AM EST. https://www.youtube.com/watch?v=SQeqdR_nbNY https://www.youtube.com/watch?v=SQeqdR_nbNY

yieldcrv 4y ago
one of the hot wallets keeps running out of ether gas to send the transactions, people are sending it ether and withdrawals are processed automatically pretty hilarious
- Ekaros 4y ago
  Ah the future of money. Bank can't give you your money because one of their accounts don't have enough money to pay for the transaction.
  - yieldcrv 4y ago
    I mean thats current money too, banks are expected to not have enough on hand to pay out all at once Crypto exchanges operate on a cold storage concept, how fast they can get their cold storage to their hot wallet is always a mystery each wallet having many kinds of assets, instead of just a single asset (your local currency), instead of man hours to move those esoteric assets they just need a little transaction fee there are a lot of ways to improve this operational experience, that this exchange just didn’t do, so even as a joke it relies on perpetuating ignorance to discredit an entire concept
    - bombcar 4y ago
      FDIC has procedures for that type of bank run - company called WDTC has armored semis ready to go, FDIC can ring them up and they can move truckloads of literal cash to banks across the country. Last time they were activated was in 2008 - supposedly there’s video somewhere. https://www.wdtc.net/armored.shtml https://www.wdtc.net/armored.shtml FDIC’s main responsibility is to avoid bank runs and they have many tools beyond taking banks like WAMU into receivership.

sillysaurusx 4y ago

If you’re seeing delays, get out now. Don’t think about it. Pull as much money as possible, out, now. The exact same thing happened at Gox. I did all kinds of mental rationalizations. Oh, they’re too big. Oh, failure was unlikely. I managed to siphon out 7 BTC. Then I traded it 2:1 with some fellow from IRC for his BTC locked up in Gox. Woo, I was going to make a 14 BTC payday. Nope. In fact, trading was still open on the exchange. I took a risk with that goxcoin. When the dust settled, I was left with 7.76 BTC that I couldn’t access. It’s still there. That was almost 10 years ago. Don’t make my mistake. The very first sign that there was a problem was delays, followed by transactions over a certain amount not processing. People seem to be reporting both.

scoofy 4y ago
Am I watching a bank run in real time?
- autokad 4y ago
  you are seeing a chapter in the history books in real time. like Enron stuff
  - pjc50 4y ago
    The closest real world analogy is probably https://en.wikipedia.org/wiki/MF_Global https://en.wikipedia.org/wiki/MF_Global : same story of illegally transferred client funds from what should have been a plain custodial brokerage.
- djbebs 4y ago
  Exchanges cannot get bankrun on. What you're watching is fraud being revealed.
  - solumunus 4y ago
    Of course they can if they're running on fractional reserves AKA fake liquidity. I don't think there is any regulation against them doing that.

kache_ 4y ago

listen i hate to say it but not your keys not your crypto

krono 4y ago

News that SHIB makes up nearly 20% of their asset reserves[1] Big asset movements between Crypto.com and Gate just in time for a proof of reserves disclosure[2] CEO trying increasingly hard to convince everyone not to panic Can't blame these people, really. 1: https://www.coindesk.com/markets/2022/11/11/cryptocom-preliminary-audit-shows-that-20-of-its-assets-are-in-shiba-inu-coin/ https://www.coindesk.com/markets/2022/11/11/cryptocom-prelim... 2: https://twitter.com/shegenerates/status/1591645956767883264 https://twitter.com/shegenerates/status/1591645956767883264

mywaifuismeta 4y ago
Maybe I'm missing something but is it a problem if SHIB is 20% of their reserves if 20% of what users are keeping on the exchange is SHIB? Of course we don't want what people actually deposited since it's a centralized exchange with no transparency. But by itself this isn't really a red flag...
- krono 4y ago
  Yes, it's yet another potentially destabilising factor you can add to the pile though.
  - runeks 4y ago
    How is it destabilizing? If 20% of depositor funds are SHIB then 20% of reserves should be SHIB.
    - blitzar 4y ago
      As far as I am concerned, if they have 90% of their reserves in literal dog shit that is fine IF their liabilities are also in dog shit. I wouldnt pay $10,000 a turd, but that is my value judgement, if someone else does then their problem.
    - krono 4y ago
      > How is it destabilizing? Potentially destabilising is what I said. In a similar fashion to how 20% of my diet consisting of Taco Bell would carry a greater destabilising potential than a the same share of FDA recommended diet conforming home-cooked meals would. > If 20% of depositor funds are SHIB then 20% of reserves should be SHIB. You're the one bringing this up, not me. Not refuting it though.

paulpauper 4y ago

and there goes 16k. Probably going back to 3k or lower soon. Why would anyone buy crypto at this point? Stick with index funds, imho . I have never seen anything hyped so much that sucks so much. It's like if someone wanted to invent a way for as many people as possible to lose as much money as possible, that would be crypto. People getting burned by plunging prices, corrupt exchanges, and scams.

deleted 4y ago
[deleted]
wruza 4y ago
going back to 3k or lower soon. Why would anyone buy crypto at this point? You’re underestimating people’s 5k fomo ptsd, imo. I definitely have one and will think twice before not buying in again.
lupire 4y ago
Index funds means buying stock in every fraudulent company on the market, and inflating the price of merely decent companies. It's freeloading off of real investors doing intelligent capital allocation, and it's going to come crashing down.

tgtweak 4y ago

Why can't exchanges operate without putting customers funds at risk and leveraging crypto for collateral... Seems silly buy is there no exchange that is happy to just make a transaction fee?

Gigachad 4y ago
Because everyone in the crypto space is a scammer or a moron.
- radicaldreamer 4y ago
  Coinbase seems to be the exception here
  - pavlov 4y ago
    Coinbase has racked up $2 billion in losses for 2022 already, so I’m not sure about the “not morons” part. At this rate a bankruptcy is not out of the question.
    - radicaldreamer 4y ago
      That loss is due to R&D and headcount spend though, they're not using customer funds to make crypto bets.
      - papa-whisky 4y ago
        I think the point is that coinbase is struggling to compete when there are tons of exchanges out there offering low/no fees and ludicrous interest payments on coins kept on the exchange. Even if those other 'exchanges' do all seem to be turning out to be ponzi schemes... For whatever reason people keep flocking to the next one.
        deleted 4y ago
        [deleted]

gonzo41 4y ago

I may be a few days early, but I think it's the beginning of the end for crypto. It's going to burn a lot of people. Trust will never be restored.

simsspoons 4y ago
Or maybe it’s the beginning of the end for centralized exchanges
- smt88 4y ago
  Then it's also the end of crypto as a consumer product. Centralized exchanges offered a ton of usability and monetary incentives that brought people into crypto. Trying to rebuild a user base without those things will essentially be impossible. Even during the days of free money in 2021, the full crypto user base wasn't huge. With high interest rates, tons of fraud in the rearview mirror, and enormous obstacles to usage, the community will be a tiny fraction of even its previous tiny fraction of traditional banking customers.
- tsimionescu 4y ago
  Is there any real alternative for money (dollars) to make it into and out of the system, at large scale?
  - ac29 4y ago
    Stablecoins
    - tsimionescu 4y ago
      How exactly will you turn 1USD into 1USDT or 1USDC or vice-versa without opening an account with a centralized exchange?
    - europeanguy 4y ago
      Stablecoins are great. Personally I recommend USD.

davidkuennen 4y ago

And Tether is struggling hard to stay alive: https://coinmarketcap.com/currencies/tether/ https://coinmarketcap.com/currencies/tether/

jbm 4y ago
It's .9987, and on an upward trajectory over the past month. (Disclaimer: Own no crypto, believe Tether is suspicious, etc..)

anonymoushn 4y ago

crypto dot com CEO Kris Marszalek has posted earlier today that his exchange has regularly sent twenty million dollars or more to other exchanges to hedge exposure gained by trading against its customers. crypto dot com CEO Kris Marszalek does not seem to understand that he has confessed to several crimes and that customers who deposit dollars at an exchange expect that they have claims against a boring business that custodies funds and collects fees, not claims against an exciting business that regularly assumes twenty million dollars of directional risk by selling customers tokens they do not physically have and then buying them somewhere else later. Here is crypto dot com CEO Kris Marszalek's confession: https://twitter.com/kris/status/1591928306097868800 https://twitter.com/kris/status/1591928306097868800 crypto dot com CEO Kris Marszalek also does not seem to understand that this is a particularly bad time to tell his customers that he is an incompetent criminal who is constantly trading against them with funds he does not have and misappropriating their deposits because less than a week ago customers of a different exchange lost 10 billion dollars in a similar situation.

artdigital 4y ago
> to hedge exposure gained by trading against its customers This is not how hedging works and he also explains this in a subsequent tweet: https://twitter.com/kris/status/1591928970693726211 https://twitter.com/kris/status/1591928970693726211 It's not "trading against it's customers" and very common practice with basically all exchanges to make sure liquidity is always there
- anonymoushn 4y ago
  If the exchange is not trading against its customers, and it is only custodying customer funds and collecting fees, how does it regularly acquire 20 million dollars of shitcoin exposure? Here's one way a crypto exchange could work: - many users deposit coins and fiat - some of those users are market makers - the users trade with each other - the exchange just custodies the coins and fiat and collects fees - the exchange does not need to send customer funds to another exchange because it is not assuming twenty million dollars of directional risk Can you explain your understanding of how it should work instead? Can you explain why people with these roles work at an exchange, an entity that does not engage in systematic trading or take on any nonzero amount of directional risk ever? https://www.linkedin.com/in/chen-x-74a83322/ https://www.linkedin.com/in/chen-x-74a83322/ https://www.linkedin.com/in/wanghan https://www.linkedin.com/in/wanghan https://www.linkedin.com/in/nicolasbourdrez/ https://www.linkedin.com/in/nicolasbourdrez/ https://www.linkedin.com/in/ronaldyiap/ https://www.linkedin.com/in/ronaldyiap/ https://www.linkedin.com/in/ernest-lim-88529b135/ https://www.linkedin.com/in/ernest-lim-88529b135/ https://www.linkedin.com/in/pravin-pathmanathan/ https://www.linkedin.com/in/pravin-pathmanathan/ https://www.linkedin.com/in/jin-marcus-wang/ https://www.linkedin.com/in/jin-marcus-wang/ https://www.linkedin.com/in/calen-zeng-b3324a196/ https://www.linkedin.com/in/calen-zeng-b3324a196/ https://www.linkedin.com/in/zzhuaj/ https://www.linkedin.com/in/zzhuaj/ https://www.linkedin.com/in/yining-liu-763a5041/ https://www.linkedin.com/in/yining-liu-763a5041/ https://www.linkedin.com/in/yu-tao-930721/ https://www.linkedin.com/in/yu-tao-930721/ https://www.linkedin.com/in/tom-chan-812b4090/ https://www.linkedin.com/in/tom-chan-812b4090/ https://www.linkedin.com/in/mark-amsellem-71a1a132/ https://www.linkedin.com/in/mark-amsellem-71a1a132/ https://www.linkedin.com/in/oliver-jieren-jia-636166b6/ https://www.linkedin.com/in/oliver-jieren-jia-636166b6/ Can you explain why they are hiring for these HFT/systematic trading roles? https://www.linkedin.com/jobs/view/3262469829/ https://www.linkedin.com/jobs/view/3262469829/ https://www.linkedin.com/jobs/view/3254166615/ https://www.linkedin.com/jobs/view/3254166615/ https://www.linkedin.com/jobs/view/3104863804/ https://www.linkedin.com/jobs/view/3104863804/ Thanks.

Animats 4y ago

From the article: "after it was revealed that multiple exchanges may have been “sharing” funds to post ‘Proof of Reserves’." This is a good time to re-read Tether's "asset assurance consolidated reserves report" for USDT. "The Management of the Company asserts the following as of 31 March 2022 at 11:59 PM UTC: ... The Group’s consolidated assets exceed its consolidated liabilities. The Group’s consolidated reserves held for the digital tokens issued exceeds the amount required to redeem the digital tokens issued. ... The reporting date is limited to a point in time as of 31 March 2022 at 11:59 PM UTC." So, there was a moment in time when Tether was fully backed. But the accounting firm explicitly states that their opinion applies only to that moment. One wonders what the situation was the next day. Tether says their reserves, as of that date, included $20,096,579,998 in "commercial paper". But whose commercial paper? It's known that Tether's transactions don't show up in the usual commercial paper markets. Money is being pulled out of Tether (USDT) in big transactions. US$3 billion in the last 3 days. None of this is definitive. But it would be a good time to get out of Tether. There's no upside, after all, and there is a downside. [1] https://assets.ctfassets.net/vyse88cgwfbl/1np5dpcwuHrWJ4AgUgI3Vn/e0dac722de3cea07766e05c52773748b/Tether_Assurance_Consolidated_Reserves_Report_2022-03-31__3_.pdf https://assets.ctfassets.net/vyse88cgwfbl/1np5dpcwuHrWJ4AgUg...

mudrockbestgirl 4y ago
Binance is not the issuer of USDT.
lend000 4y ago
> Binance is the issuer of USDT Surely you mean Bitfinex.
- Animats 4y ago
  Right, sorry. Edited parent post to fix.
ceejayoz 4y ago
Tether's assurances should always be read with this in mind. https://ag.ny.gov/press-release/2021/attorney-general-james-ends-virtual-currency-trading-platform-bitfinexs-illegal https://ag.ny.gov/press-release/2021/attorney-general-james-... > In the face of persistent questions about whether the company actually held sufficient funds, Tether published a self-proclaimed ‘verification’ of its cash reserves, in 2017, that it characterized as “a good faith effort on our behalf to provide an interim analysis of our cash position.” In reality, however, the cash ostensibly backing tethers had only been placed in Tether’s account as of the very morning of the company’s ‘verification.’ > On November 1, 2018, Tether publicized another self-proclaimed ‘verification’ of its cash reserve; this time at Deltec Bank & Trust Ltd. of the Bahamas. The announcement linked to a letter dated November 1, 2018, which stated that tethers were fully backed by cash, at one dollar for every one tether. However, the very next day, on November 2, 2018, Tether began to transfer funds out of its account, ultimately moving hundreds of millions of dollars from Tether’s bank accounts to Bitfinex’s accounts. And so, as of November 2, 2018 — one day after their latest ‘verification’ — tethers were again no longer backed one-to-one by U.S. dollars in a Tether bank account.

oefrha 4y ago

> Crypto.com currently have around US$2.5 billion in reserve on the platform, with more than 20% of that number being comprised by Shiba Inu token (SHIB). Geez, isn’t that a dogecoin knockoff meme coin? Guess you can now become a crypto billionaire on the back of a knockoff of a meme. What a strange world we live in.

ChainOfFools 4y ago
And Dogecoin itself was created as a joke, the developer stated that took him about 2 hours, including the logo, throw together. its literally nothing more than a copy-paste of another coin (itself a 95% identical copy of bitcoin) with a few irrelevant cosmetic changes and a deliberately absurd emission rate setting. The point of Dogecoin was to mock how ridiculous the "sound money" narrative of cryptocurrency is by showing how easily more - infinitely more - of it could be created with almost zero efforr, and nobody seemed to care to do the least bit of common sense research before ithrowing real money into it.
- vanattab 4y ago
  >The point of Dogecoin was to mock how ridiculous the "sound money" narrative of cryptocurrency is by showing how easily more - infinitely more - of it could be created with almost zero efforr, and nobody seemed to care to do the least bit of common sense research before ithrowing real money into it. I am no fan of crypto but that is non different then any fiat money no? In fact dodge at least has some sort of rate limit where fait system have non.
  - Gigachad 4y ago
    That’s the point it makes. That crypto is not limited because anyone can make a new coin any time they want. While crypto zealots will insist that bitcoin is inherently valuable because you can’t create more. But being limited has no inherent value.
  - arlcode 4y ago
    Central banks, indirectly, can force people to use their currency (e.g. for taxes) and actively make decisions to try to follow a deliberate financial policy. Their states command economic, diplomatic or military power which they often use to protect and develop their economies and the associated currencies. Often the decision makers are accountable in the form of elections and rule of law. Crypto on the other hand is purely market driven and free floating. It's very easy for bad actors to manipulate the currency itself rapidly, something that does not happen to Dollars or Euros. Cryptobros and others disagree whether anything outside of fully unregulated market forces is a good thing.

bandrami 4y ago

It's really kind of fun to watch people rediscover why we have bank regulations in real time.

edf13 4y ago

Meanwhile - the UK government has a £58 billion hole on their finances…

onlyrealcuzzo 4y ago
Meanwhile, the UK government provides countless services to its 68M citizens and has claims to their future taxes. What's your point?

abrookewood 4y ago

This is just crazy: "Crypto.com “Accidentally” Transfers $400M to the Wrong Wallet" [0]. How is that sort of mistake even possible? [0] https://thechainsaw.com/defi/crypto/crypto-com-accidentally-transfers-400m-to-rival-exchange/ https://thechainsaw.com/defi/crypto/crypto-com-accidentally-...

pjc50 4y ago
No safety rails. Crypto is an unconfirmed transaction system that does not require confirmation from the recipient. At least in this case they were able to get it back, it's trivial to transfer crypto to a wallet to which nobody has the password and it's forever unrecoverable. (If I were designing one of these things, which I am not, I would make a transaction payee-initiated, like the issuing of an invoice which the payer signs)
chinathrow 4y ago
Not defending crypto in any form or this dumb move but that has happened before in traditional banking as well. https://www.whio.com/news/trending/50-billion-accidentally-deposited-louisiana-familys-bank-account/CCD22N6WMNGU3INCIVIET42LEM/ https://www.whio.com/news/trending/50-billion-accidentally-d...
- dncornholio 4y ago
  Accidentally moving money to a wrong account, sure.. mistakes happen. But in this case, it was during a reserve audit.. and the address was of a 'whitelisted' exchange. This brings suspicions crypto wallets are covering their asses, that they share currencies to proof false customer reserves..
- abrookewood 4y ago
  Yes, you're right, that's worth pointing out. Both instances are mind boggling.

artdigital 4y ago

At this point I am convinced this is just mass hysteria, and picking on CDC is the trend of the day. The amount of FUD is through the roof, everyone is scared of losing money, which makes sense and it's definitely the smart move to withdraw and wait until the dust settles. Personally, I reckon they'll be fine. Crypto.com has been playing nicely with regulations and did the right business decisions (downsizing, reducing of rewards) at the right time. They are in my eyes one of the most regulated and "playing by the books" exchange out there, but yes time will tell. So far I've not seen any arguments of them actually doing anything wrong, just the echo chamber about "funds are leaving Crypto.com, so you should do too", including in this thread here. If the proof of reserves that they published holds up, this should be no problem for them to overcome. RE: the constant argument that 20% of their asset reserves are in SHIB - this is not CDC making investments in SHIB, but users buying SHIB and having it in their wallet. Says more about the userbase as a whole than it does about CDC who only enables it /EDIT: the CEO had an AMA on YT just now that goes into a lot of the points I mentioned: https://www.youtube.com/watch?v=SQeqdR_nbNY https://www.youtube.com/watch?v=SQeqdR_nbNY

shawabawa3 4y ago
Do you realise they publicly admitted to sending $400m of Ethereum from cold storage to another exchange "by accident" That means at best their internal processes are terrible
- b4je7d7wb 4y ago
  Are you implying they didn't learn anything from that?
  - ceejayoz 4y ago
    I think they're implying they should've learned that lesson much earlier with much smaller amounts, and that if they haven't by now, you should assume they won't ever.
- artdigital 4y ago
  Obviously that wasn't so great and I'm not happy with that either What Kris said in the AMA was something along the lines: Whitelisted addresses where funds can get sent to are heavily controlled, and no matter where it went by accident, all whitelisted addresses are at places that can be 100% retrieved again

deleted 4y ago

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jbverschoor 4y ago

Doesn’t that mean there’s more demand for eth right now?

zeroclip 4y ago

Another reason not to depend on CEXes. Real end game for crypto is DeFi and DEXes, not a shady company with a marketing team.

SirChainsaw 4y ago

Has anyone managed to get their/any BTC off Crypto.com in the last few hours? I got my ETH and some other tokens off easily enough but I've been waiting ~18 hours now for the BTC to arrive :s.

benjaminwootton 4y ago
I switched BTC and other coins to ETH and then pulled ETH to Coinbase. Probably lost some on the trades but wanted to get out as efficiently as possible. It took about 6 hours to settle. I do think there has been lots of FUD about crypto.com such as moving money into their own wallet and back, but do feel I would sleep better at night with funds in Coinbase.

londgine 4y ago

what is the benefit to leaving crypto in a wallet held by another party. I guess they could lower the transition fees when transferring from one wallet to another on their platform. and if you forget your password, they may make it easier to recover. but is that all the benefit?

Renaud 4y ago

The problem might be different here, but all the exchanges I have used have ended up dead, and I consider myself very lucky not to have lost everything I had. First there was MtGox where I happily sold BTC and then waited weeks for a bank transfer that never came. I was lucky to be able to re-purchase some of the BTC (at a loss) and transfer them out. That was just a few weeks before MtGox fell. Then there was ANX/ANXPro. Everything was fine for a while. Over time, they ceased trading and at some point app and website stopped being functional. I had left some crypto there, at time it wasn't worth much. I panicked once the value shoot up and I couldn't find a way to recover them. Fortunately, I had chosen ANX because they were local. I went to the listed address there in person, expecting it to be closed. I found the place, it was nondescript, no sign, no-one in sight. I was shaking when I pressed the bell and a guard came to answer. Fortunately, the company was still running in some fashion. There was a counter and I was able to transact my crypto out. Had I not been local, I would have probably lost it all. Then there was FTX... I traded cautiously last year for a little while, never leaving too much for too long, then decided that crypto was all too nerve-wracking for me and sold everything I had. Probably the best thing I ever did. I have friends who lost big in the FTX debacle and will probably never recover a dime. The morale of the story is that I wouldn't trust ANY exchange. They move so much money that the temptation is too great not to use it for something else. Despite claims, I don't trust any to have the structure and oversight necessary to avoid misusing funds that don't belong to them.

aborsy 4y ago
Can’t you use an exchange, keeping your money offline (eg, in an hardware wallet) and just authorize the required amount out and in, in real time?
- pjc50 4y ago
  Not in "real time": blockchain settlement has to wait for a block. And you incur on-network transaction fees plus whatever fee the exchange imposes for transfers out. (Besides, many people are "day trading" on these exchanges because it's a form of addictive gambling) Oh and then there's "staking": https://ftx.com/staking https://ftx.com/staking which encourages people to keep tokens on the exchange by pretending to pay them interest rates. And offering various other multi-level-marketing incentives. I see "Free Daily ERC20/ETH Withdrawals : NaN" on that page, which is fun.

xch 4y ago

If you don’t live binance or still holding $BNB i just want to wish you good luck

brettermeier 4y ago

I really enjoy seeing Crypto-Bros burn! :D

NohatCoder 4y ago

The really easy observation to make is that crypto.com is operating at a massive deficit. Their advertising budget is absurdly large, and then they pay some hefty interests to their customers. Is there any part of the business that actually make money for them? Because it seems like all they do is loan more money to keep the Ponzi scheme going.

olodus 4y ago

Isn't it the case that as long as these exchanges keep acting so bank-like (holding on to people's keys, possibly using them for trading or fractional trading or what you would call it) they will keep having these problems since crypto is so prone to "bank"-runs. There are no real reason for any of their customers to keep their money with them as soon as there is even a hint of suspicion of illiquidity or insolvency. In real banking you a lot of the time atleast need to go and take your money out but in the crypto currency world that can be automated. I feel like the only real way they could be run while avoiding this to only work as a broker to make dealto purchase coins available to users and possibly also sell a wallet software or something that is mostly a frontend and no keys/money is kept with them. Then they are only ever able to trade on the exchange fees and purchase money for the wallets they get. But I guess such a reasonable way to run a buisness is no way to get filthy rich...

lvl102 4y ago

People really have to stop using these exchanges to store EVERYTHING. Do you not see that it defeats the whole purpose of crypto?

davidgerard 4y ago

The run on crypto.com has hit Sky News, Reuters, AFP and Bloomberg. Withdrawals are still open. I believe Binance was doing some bailing-out.

freddealmeida 4y ago

They should. Not your keys, not your coins.

misja111 4y ago

Meanwhile, BTC price has gone up today. I guess this makes sense when it's only possible to deposit.

lupire 4y ago
It's not up for sellers, only for buyers.

pibechorro 4y ago

Unless you are a professional daily trader, keeping any large amount of funds in a 3rd party exchange is reckless behavior.. before and after ftx. Since the caveman days, not your keys, not your coins.

rejectfinite 4y ago

God I love seeing crypto chuds lose "money"

shapefrog 4y ago

In 6-12 months time there will be the inevitable spike in "I lost my crypto keys and lost all my money".