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I'm sorry for the ignorance, but why a crypto exchange is expected to keep the money of the customers in case they want to change back their crypto, and it's no

I'm sorry for the ignorance, but why a crypto exchange is expected to keep the money of the customers in case they want to change back their crypto, and it's not like a regular exchange house where you exchange one currency for another currency, and once the transaction was made, they not obligated to exchange back.

detaro 4y ago
It's not expected to exchange back, it is expected to give back cryptocurrency deposited there.
- XCSme 4y ago
  Wait, so they don't allow even for sending the crypto to a different wallet?
- culanuchachamim 4y ago
  But from what I understood from the article is that they halting withdrawals of cash, the crypto themselves seems fine...
  - coffeebeqn 4y ago
    That’s always the slow walk with these. Expect more bad news in subsequent updates
  - detaro 4y ago
    Where does it say that? I don't see anything that would suggest it isn't about all withdrawals?
jgeralnik 4y ago
It seems you are thinking of the crypto exchange as selling crypto to customers and then "holding on" to their money. That's not the right model. Party A deposits 1 BTC into the exchange. Party B deposits $1000 into the exchange. Party A wants to sell a BTC for $1000 and party B wants to buy a BTC. They trade through the exchange, pay some fee to the exchange, and an entry in a database is changed such that the $1000 in the exchange now belongs to A and the 1BTC in the exchange's wallet now belongs to B. Since actually holding cryptocurrency is inconvenient for users, many will just choose to keep the BTC on the exchange until they want to use it/sell it for cash or a different cryptocoin. Many crypto users are speculators who view it the same as holding stocks in brokerage accounts and not as just an exchange. This money is held in the exchange platform but belongs to the users. They should in theory be able to withdraw it whenever they want. Instead the crypto exchange decides to make use of these idle customer funds and invest in speculative funds/embezzle all the money and all of a sudden there is not enough funds in the exchange for all users to withdraw.

detaro 4y ago

It's not expected to exchange back, it is expected to give back cryptocurrency deposited there.

XCSme 4y ago
Wait, so they don't allow even for sending the crypto to a different wallet?
culanuchachamim 4y ago
But from what I understood from the article is that they halting withdrawals of cash, the crypto themselves seems fine...
- coffeebeqn 4y ago
  That’s always the slow walk with these. Expect more bad news in subsequent updates
- detaro 4y ago
  Where does it say that? I don't see anything that would suggest it isn't about all withdrawals?

jgeralnik 4y ago

It seems you are thinking of the crypto exchange as selling crypto to customers and then "holding on" to their money. That's not the right model. Party A deposits 1 BTC into the exchange. Party B deposits $1000 into the exchange. Party A wants to sell a BTC for $1000 and party B wants to buy a BTC. They trade through the exchange, pay some fee to the exchange, and an entry in a database is changed such that the $1000 in the exchange now belongs to A and the 1BTC in the exchange's wallet now belongs to B. Since actually holding cryptocurrency is inconvenient for users, many will just choose to keep the BTC on the exchange until they want to use it/sell it for cash or a different cryptocoin. Many crypto users are speculators who view it the same as holding stocks in brokerage accounts and not as just an exchange. This money is held in the exchange platform but belongs to the users. They should in theory be able to withdraw it whenever they want. Instead the crypto exchange decides to make use of these idle customer funds and invest in speculative funds/embezzle all the money and all of a sudden there is not enough funds in the exchange for all users to withdraw.