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Not your wallet, Not your coins. Or Synthetic coins for most of these exchanges.

ceejayoz 4y ago
"Not your wallet, not your coins" is true, but kinda irrelevant here. The coins themselves are sometimes worthless (like FTX's token), or can be frozen (Tether does this: https://www.coindesk.com/business/2022/11/10/tether-freezes-46m-of-usdt-following-law-enforcement-request/ https://www.coindesk.com/business/2022/11/10/tether-freezes-...). It doesn't matter if you hold a collapsed coin in your wallet or an exchange's; it's still not gonna do you any good.
- rufusroflpunch 4y ago
  It matters a bit, as it seemed that FTX had $1+ billion in Bitcoin customer liabilities which have evaporated.
  - thedangler 4y ago
    Because they never bought the coins to begin with. It's marked down in a ledger that this person has this many coins. It only matters when someone wants to transfer coins to another exchange or their own wallet. Then they have to purchase the coins and send them.
    - hanniabu 4y ago
      > Because they never bought the coins to begin with. Users bought it but the exchange didn't have it, which is what the OP was saying. If you don't have the keys, you don't really have the coins.
      - thedangler 4y ago
        Also interesting. Is this the same thing. https://i.redd.it/qofb7x8zmj0a1.jpg https://i.redd.it/qofb7x8zmj0a1.jpg Citadel Securities has in their books securities sold, not yet purchaed. $65 billion. How is this not the same thing ? lol
        rufusroflpunch 4y ago
        I would argue it's not necessarily a problem to have liabilities for which you do not have assets on hand, whether it's Bitcoin or some security. The difference between these two situations is: 1) FTX didn't even bother listing their customer liabilities on their balance sheet, unlike Citadel. 2) I would assume (hope) that Citadel isn't a completely fraudulent company without the capital to make good on those assets if delivery is demanded!
        pram 4y ago
        It's not the same because there are actual equities involved in a short sale, Citadel is just borrowing them. They could obviously get completely wrecked, but the shares are real things.
        hanniabu 4y ago
        It is the same, it's the fact that you don't really own it or know if the 3rd party has it or has the means to get it. If you have the keys to the wallet you're certain of what you have and you have full domain.
        SamReidHughes 4y ago
        They’re a market maker, so wouldn’t those be options contracts? The “securities owned” line would be other options contracts that hedge against them, no?

"Not your wallet, not your coins" is true, but kinda irrelevant here. The coins themselves are sometimes worthless (like FTX's token), or can be frozen (Tether does this: https://www.coindesk.com/business/2022/11/10/tether-freezes-46m-of-usdt-following-law-enforcement-request/ https://www.coindesk.com/business/2022/11/10/tether-freezes-...). It doesn't matter if you hold a collapsed coin in your wallet or an exchange's; it's still not gonna do you any good.

rufusroflpunch 4y ago
It matters a bit, as it seemed that FTX had $1+ billion in Bitcoin customer liabilities which have evaporated.
- thedangler 4y ago
  Because they never bought the coins to begin with. It's marked down in a ledger that this person has this many coins. It only matters when someone wants to transfer coins to another exchange or their own wallet. Then they have to purchase the coins and send them.
  - hanniabu 4y ago
    > Because they never bought the coins to begin with. Users bought it but the exchange didn't have it, which is what the OP was saying. If you don't have the keys, you don't really have the coins.
    - thedangler 4y ago
      Also interesting. Is this the same thing. https://i.redd.it/qofb7x8zmj0a1.jpg https://i.redd.it/qofb7x8zmj0a1.jpg Citadel Securities has in their books securities sold, not yet purchaed. $65 billion. How is this not the same thing ? lol
      - rufusroflpunch 4y ago
        I would argue it's not necessarily a problem to have liabilities for which you do not have assets on hand, whether it's Bitcoin or some security. The difference between these two situations is: 1) FTX didn't even bother listing their customer liabilities on their balance sheet, unlike Citadel. 2) I would assume (hope) that Citadel isn't a completely fraudulent company without the capital to make good on those assets if delivery is demanded!
      - pram 4y ago
        It's not the same because there are actual equities involved in a short sale, Citadel is just borrowing them. They could obviously get completely wrecked, but the shares are real things.
      - hanniabu 4y ago
        It is the same, it's the fact that you don't really own it or know if the 3rd party has it or has the means to get it. If you have the keys to the wallet you're certain of what you have and you have full domain.
      - SamReidHughes 4y ago
        They’re a market maker, so wouldn’t those be options contracts? The “securities owned” line would be other options contracts that hedge against them, no?