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> An exchange shouldn't count deposited crypto as their asset. It is an asset of their customers. Yes they should. A deposit liability arises from the fact tha

> An exchange shouldn't count deposited crypto as their asset. It is an asset of their customers. Yes they should. A deposit liability arises from the fact that they received an asset in a deposit transaction. Liabilities and assets aren't mutually exclusive in any transaction, and both must increase when you receive a customer's deposit, or else where does the liability come from? > Banks need to be heavily regulated because they are investing the assets of their customers. An exchange should not be doing that, it should be holding customer assets and making them available on request. If the exchange doesn't spend assets they received from their customers, they still have assets. If they sit on them until they receive instruction from a customer to dispose of it, it's still an asset on their books until they carry out the instruction.

remcob 4y ago
> Yes they should. A deposit liability arises from the fact that they received an asset in a deposit transaction. Liabilities and assets aren't mutually exclusive in any transaction, and both must increase when you receive a customer's deposit, or else where does the liability come from? Does a cash transporter count the contents of their armored vans as assets? Does DHL count the contents of their vehicles and warehouses as assets? Why should exchanges be different? I know it's the law for exchanges to account custodial funds as assets (SAB121), but I don't see why it should be this way. In fact it seems to achieve the opposite of consumer protection.
- deleted 4y ago
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- nulbyte 4y ago
  They way I look at it, deposit and withdraw implies storage. I'm not giving you something to transport, I'm giving you something to store until I tell you what to do with it at a later time. I'm not sure I agree it achieves the opposite of consumer protection. The liability to the customer is equal to the asset being stored this way. Lack of regulation is what achieves the opposite.

remcob 4y ago

> Yes they should. A deposit liability arises from the fact that they received an asset in a deposit transaction. Liabilities and assets aren't mutually exclusive in any transaction, and both must increase when you receive a customer's deposit, or else where does the liability come from? Does a cash transporter count the contents of their armored vans as assets? Does DHL count the contents of their vehicles and warehouses as assets? Why should exchanges be different? I know it's the law for exchanges to account custodial funds as assets (SAB121), but I don't see why it should be this way. In fact it seems to achieve the opposite of consumer protection.

deleted 4y ago
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nulbyte 4y ago
They way I look at it, deposit and withdraw implies storage. I'm not giving you something to transport, I'm giving you something to store until I tell you what to do with it at a later time. I'm not sure I agree it achieves the opposite of consumer protection. The liability to the customer is equal to the asset being stored this way. Lack of regulation is what achieves the opposite.