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If Binance is insolvent(which looks like the popular sentiment here), could it be possible that they're playing an angle to "fix" the solvency given enough time

If Binance is insolvent(which looks like the popular sentiment here), could it be possible that they're playing an angle to "fix" the solvency given enough time delay? Or does their insolvency practically guarantee that they will never be solvent again? Obviously the answer depends on the amount of financial trouble they're in, or whether they're in trouble at all. I'm not sure about anything else though.

Zanfa 4y ago
I'd bet on Binance just delaying the inevitable collapse, rather than trying to fix the underlying issues. Judging from the FTX balance sheet, they gambled all of their money on shitcoins and random projects without any sense of logic. No amount of fixing would have helped, other than an magical perpetual bull market. Odds are Binance is also fundamentally screwed.
- shapefrog 4y ago
  IF they never gambled their depositors money, then they are/will be fine. Running an exchange, taking a cut of all transactions on your platform is effectively impossible to collapse (excluding your actual costs of doing business).
  - unmole 4y ago
    They can even do proprietary trading using the market information they have!
    - shapefrog 4y ago
      For an unreglated market, it really is a licence to print money - the one and only thing you have to do is keep your depositors assets stored in the asset they have deposited or exchanged to.
    - cuteboy19 4y ago
      What do you mean by can? Frontrunning client trades is standard crypto exchange practice
  - JumpCrisscross 4y ago
    > never gambled their depositors money, then they are/will be fine You’re ignoring liability. Even if they never levered, they’re vulnerable to a regulatory crackdown. Tether and Binance are predictable numpties-will-lose-money cases.
sgt101 4y ago
History shows that this is always what happens, and history shows it always fails. But I think history must have an (anti)survivor bias here because if you do manage to move from insolvent to solvent I think that you don't ever tell anyone. But... on the other hand maybe history is right and everyone who gets into this mess inevitably only makes it worse by struggling.
balderdash 4y ago
My guess is that binance is technically insolvent (negative net assets) but not yet factually insolvent (still able to meet day-to-day liquidity needs), and without a major turn in the crypto market, has no chance of rectifying their technical insolvency, and are playing for time with regards to their factual insolvency.

Zanfa 4y ago

I'd bet on Binance just delaying the inevitable collapse, rather than trying to fix the underlying issues. Judging from the FTX balance sheet, they gambled all of their money on shitcoins and random projects without any sense of logic. No amount of fixing would have helped, other than an magical perpetual bull market. Odds are Binance is also fundamentally screwed.

shapefrog 4y ago
IF they never gambled their depositors money, then they are/will be fine. Running an exchange, taking a cut of all transactions on your platform is effectively impossible to collapse (excluding your actual costs of doing business).
- unmole 4y ago
  They can even do proprietary trading using the market information they have!
  - shapefrog 4y ago
    For an unreglated market, it really is a licence to print money - the one and only thing you have to do is keep your depositors assets stored in the asset they have deposited or exchanged to.
  - cuteboy19 4y ago
    What do you mean by can? Frontrunning client trades is standard crypto exchange practice
- JumpCrisscross 4y ago
  > never gambled their depositors money, then they are/will be fine You’re ignoring liability. Even if they never levered, they’re vulnerable to a regulatory crackdown. Tether and Binance are predictable numpties-will-lose-money cases.

sgt101 4y ago

History shows that this is always what happens, and history shows it always fails. But I think history must have an (anti)survivor bias here because if you do manage to move from insolvent to solvent I think that you don't ever tell anyone. But... on the other hand maybe history is right and everyone who gets into this mess inevitably only makes it worse by struggling.

balderdash 4y ago

My guess is that binance is technically insolvent (negative net assets) but not yet factually insolvent (still able to meet day-to-day liquidity needs), and without a major turn in the crypto market, has no chance of rectifying their technical insolvency, and are playing for time with regards to their factual insolvency.