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Binance temporarily suspends USDC withdrawals
- gizzlon 4y ago"Binance Withdrawals Surge as Concerns About Its Reserve Report Spook Traders" : https://www.coindesk.com/markets/2022/12/13/binance-withdrawals-surge-as-concerns-about-its-reserve-report-spook-traders/ https://www.coindesk.com/markets/2022/12/13/binance-withdraw...
- mikelovenotwar 4y agoHopefully another big player in the global ponzi scheme hitting the wall soon.
- andrewinardeer 4y agoMaybe, maybe not. But your comment comes off as mean spirited. People will lose a lot of their hard earned money if that happens. Sometimes people's empathy doesn't travel past their own personal horizon which seems to be the case with your comment.
- mikelovenotwar 4y agoI wish for large international ponzi schemes to cease to be, preventing further influx from people who don't know better. For those already in the ponzi scheme there's little that can be done to convince them they're in a ponzi scheme, or cult. People lose their money on many things, hard earned or otherwise, regardless wishing that avenues which are designed to facilitate such losses cease to exist is not mean spirited.
- cypress66 4y agoYour entire comment hinges on the idea that Binance is a scam, which nobody knows for a fact. And I would hope binance is not a scam, so people don't lose their money.
- mikelovenotwar 4y ago>Your entire comment hinges on the idea that Binance is a scam, which nobody knows for a fact. I make no mention of Binance as a scam. The entire industry is a ponzi scheme, Binanace are a large player in the game.
- cypress66 4y agoBinance is an exchange where you can exchange dollars for cryptocurrencies. It is well understood that the cryptocurrencies you purchase can crash to almost nothing. Nobody's complaining about that. The issue here is the possibility of Binance stealing user's assets, like FTX did. Which is obviously illegal. To explain it in "crypto hater" terms, it's like someone stealing people's beanie babies.
- mikelovenotwar 4y ago>Binance is an exchange where you can exchange dollars for cryptocurrencies. I am aware of this, and hope they fail along with the rest of the ponzi scheme. > The issue here is the possibility of Binance stealing user's assets, like FTX did. Which is obviously illegal. This is one of the issues, and while important it's not the only issue.
- Johanx64 4y agoWhat we do know is that binance hasn't ever done a proper audit, considering that, I can call Binance a scam with a high degree confidence and the only way for me to stop saying it is by them doing a full audit by a reputable company. Which they are not going to do since they are scam.
- hocuspocus 4y ago> People will lose a lot of their hard earned money if that happens. Nobody forced them to gamble their hard earned money.
- flumpcakes 4y agoSo we shouldn't go after Ponzi schemes or fraud, because the victims money is tied up in the crime?
- causi 4y agoPeople will lose a lot of their hard earned money if that happens. As crypto emerges from early adopter status, the "crypto-bro/normal person" ratio of the victims decreases over time, therefore the earlier it crashes the larger a portion of the victims are people who deserve it and should've known better. It should burn down as soon as possible to protect the innocent.
- xuki 4y ago> We expect the situation will be restored when the banks open. At least we'll know soon...
- voxelghost 4y agoIf they were telling the truth their should have been; - USDC withdrawals will be restored when the banks open. Expect, means in best case, they have no idea what the problem is, worst case it's all coming tumbling down
- nailer 4y agoWhat is BUSD and why does it affect withdrawals of an unrelated token?
- gizzlon 4y agoGuess it's Binance' stable coin. It does seems a little strange, do they convert all their assets to their own stable coin? :O https://coinmarketcap.com/currencies/binance-usd/ https://coinmarketcap.com/currencies/binance-usd/
- joyfylbanana 4y agoYes they do, they announced it a while back. It is certainly interesting way to handle customer assets.
- vineyardmike 4y agoIn some horribly twisted way, it might make sense? If BUSD is a “safe” stable coin backed by real, liquid, currency in a binance bank account (lots of IFs), it might make more sense as accounting than storing it as USDC stored in another company’s bank account, in that other company’s country. If that company makes bad decisions, it could impact binances customers. Especially after FTX and prior stablecoin fiascos, storing customers funds in your own bank seems prudent. If binance can soft-real-time mint USDC during bank hours, then any conversion can be done by a regular-banking wire transfer. All they need is some pre-minted reserves for off-hours. Orrrrrrr they’re playing games with customers funds and hiding it in their own coffers. In which case BUSD is backed by a lie. FTX is familiar.
- jacquesm 4y ago> hiding it in their own coffers Or they have spent it or given it out in bad loans.
- vineyardmike 4y ago
- xg15 4y agoIf their PAX/BUSD -> USDC conversion only works during the opening hours of that New York bank, wouldn't this be well-known to everyone who tried to convert to USDC in the past? As in, what "situation" are they talking about? Going only from their tweet, there is nothing out of the ordinary happening at all...
- 3np 4y agoThe idea would be that in the past their buffer of liquidity has been enough that they cover up without having to go to the bank between opening hours, and that recent surge in withdrawals (this would be the "situation") has now dried up that buffer. Not speaking to how that reflects actual events, it's all consistent.
- vgatherps 4y agoIn theory, this is related to their recent automated BUSD <-> USDC conversion program. They started treating the two as fungible, and so have split reserves between the two (likely BUSD for the most part). If your reserves of USDC get drained faster than you can replenish, then you can't withdraw more USDC (even though it's backed since you have a BUSD waiting to convert). Such a system runs along just fine, until suddenly there's huge USDC withdrawal pressure over the weekend, you can't get dollars from the bank BUSD uses to the bank USDC uses, and the USDC reserve goes empty. Wait for banks to get back into business and everything is super fine. From the outside the above situation and a true insolvency look quite similar. It should be possible to inspect their BUSD balances on chain though?
- xg15 4y agoAh ok. Yeah, them using up their stock of USDCs so they have to wait now until they can buy more would actually make sense.
- shawabawa3 4y agoThey likely have a reserve of say $100M in USDC to fulfil withdrawals, and only when withdrawals exceed that amount before they can do the bank transfers to top it up will they have to suspend withdrawals
- Varloom 4y agoHere we go again. Run while you can.
- deleted 4y ago[deleted]
- Mistletoe 4y agoThe first crypto business that hires a PR person to take over all tweeting will rule the space. I can’t watch people destroy so much value solo tweeting anymore. The same goes for almost any business or celebrity I can think of.
- projektfu 4y agoOkEx/OkCoin are definitely fronted by PR.
- bongoman37 4y ago[dead]
- SilverBirch 4y agoAh yes, truly the peak of cryptocurrency "Sorry, we can't process that highly decentralized censorship proof freedom coin, we're waiting for our bankers in New York to wake up".
- plsbenice34 4y agoNobody with basic knowledge in this area would think of USDC as "highly decentralized censorship proof freedom coin". It is centralised and pegged to USD so obviously it must be intentionally interlinked with the banking system.
- SilverBirch 4y agoThis is the fiction of Crypto though - we're all here in this space because we want decentralized censorship-proof, public recorded transactions, and we then proceed to immediately abandon all of those principles to trade dollar denominated assets on a central exchange that operates out of a shady jurisdiction. Yes, we all know what the point of crypto was. Yes we all know what is actually happening, the only question left is why the hell are we still doing it?
- mikelovenotwar 4y ago> Yes we all know what is actually happening, the only question left is why the hell are we still doing it? One of the most difficult things to do is explain to a cult member that they're a cult member. Similar to participants in the great crypto ponzi scheme.
- joyfylbanana 4y ago> we're all here in this space because we want decentralized censorship-proof, public recorded transactions dude what. no. the majority of people are "here" just wanting the numbers go up in the closed-source centralized database that their trusted banker runs. there are small group of people that actually care about decentralization and open source access to money, that number is maybe 0,01% of the total "crypto" users.
- 4y ago
- sho 4y agoThe quotes around "temporarily" are editorialising, IMO. They should be removed. No fan of Binance but it's a reasonable explanation and submitter has given no reason to think it is not, indeed, a temporary situation, as has happened many times in the past without particular note.
- janmo 4y agoIt is not reasonable at all. It means that: 1. They are not prepared at all for a "bank run" 2. USDC on the exchange are not backed by real USDC. Therefor they need to market buy them. 3. CZ is telling people to withdraw using BUSD and USDT, both more or less Binance controlled stables that are much harder to convert into real USD. It would be extremely wise to exit Binance and Binance related coins such as BNB, BUSD and Tether.
- mikelovenotwar 4y ago> It would be extremely wise to exit Binance and Binance related coins such as BNB, BUSD and Tether. Indeed, but the great ponzi scheme rolls on none the less :/
- Galanwe 4y ago> They are not prepared at all for a "bank run" Nobody is prepared for a bank run, that would be idiotic. It would mean storing strictly only liquid assets. > USDC on the exchange are not backed by real USDC. Therefor they need to market buy them. That's pure speculation on your side... Withdrawal pauses have happened many times in the past, it's not really alarming. Only when something bad happens afterward do people remember there was a withdrawal pause before, but there has been countless pauses before with no problem afterward. > Binance and Binance related coins such as BNB, BUSD and Tether. What...
- hef19898 4y agoBanks are, up to whatever the legally guaranteed deposit insurance is, prepared for bank runs. And I never heard of actual banks limiting or even pausing withdrawls, non-cash, ever. And those cases where they do, e.g. Libanon, are a dead give away the economy is fucked. So, drawing from that parallel, the crypto economy might very well be fucked.
- esskay 4y agoThe writings on the wall.
- ivanmontillam 4y agoWhat I fear is that U.S. Government is meddling with the only exchange that works properly in Venezuela and Argentina, especifically for the P2P trade. I know this tweet is not about P2P, but let me explain. In Venezuela and Argentina, the parallel markets are the true king of the economy. You have to exchange money using P2P exchanges if you want to barely have decent personal finances, you know, to access good currency exchange rates. It's true that other P2P exchanges exist, like Airtm and Reserve. They just do not have the capacity nor good exchange rates to appropriately cover market needs. They just can't, they are not as resourceful as Binance. If the U.S. Government starts meddling with Binance and Binance has to close, reduce functionality or kill the P2P feature on the grounds of AML, it's going to send Venezuela and Argentina to the dark ages again. EDIT: Egregious typos.
- jacquesm 4y agoThe government isn't 'meddling' with Binance, Binance is under the spotlight because it appears that keeping reserves is a bit of a weak point with all of these new finance companies. If anything you should be grateful that there (finally) is some oversight, but I fear it is too little and too late.
- ivanmontillam 4y agoI have to disagree. That oversight in theory is good. In practice it turns out to be: "The OFAC and FATF hate your people as a whole. We cannot service you anymore. Kthxbai." I will trust regulators when regulators do not exclude people where systems would be most useful. It all boils down to: if you're not credit worthy, you must be a terrorist, capomafia or at best, a tax evader. See what happened to Uphold[0], which is unfortunate. -- [0]: https://support.uphold.com/hc/en-us/articles/6782239879451-Why-is-Uphold-pulling-out-of-Venezuela- https://support.uphold.com/hc/en-us/articles/6782239879451-W...
- ethanbond 4y agoThere are plenty of ways to transact money if you’re not creditworthy. What’s “missing” is a non-fraudulent way to get credit if you’re not creditworthy, and that has nothing to do with US enforcement of fraud and everything to do with the fact that only fraudulent lenders will lend to non-creditworthy people.
- farseer 4y agoConvert to USD and run if you still can. The best time to exit was yesterday. Second best is right now!
- sammy2255 4y agoLmao HN has such a hate boner for crypto
- rhaway84773 4y agoCrypto has such a hate boner for Crypto. Destroyed over $2tn in value and is frauds all over the place. Any hate boner HN may have for crypto pales in comparison to what the crypto people have for it.
- sammy2255 4y agoOh and the US market too? How much value has that lost this year?
- onpensionsterm 4y agoDestroying value and market price are unrelated concepts. The eternal cognitohazard of discussing crypto online is that you are dealing with deeply invested people without any guarantee that they understand finance in general.
- crypt1d 4y agoI honestly expected more from the HN crowd. The comments here are disturbingly inaccurate and fear mongering. For those of you that don't want to sift through the BS and just get the gist (from someone deep in this space): - Binance suspended USDC withdrawals. You can still withdraw in other stablecoins, fiat, or crypto. You can withdraw BUSD and swap to USDC on another exchange (dex). So really, this is not a big deal. - The reason why this happened is - a while ago, Binance started automatically converting user USDC to BUSD upon deposits. Since then, we've then seen large amounts of USDC being sent to Circle from Binance, supposedly for redemption purposes. - This now (likely) means that Binance has a lot of cash on hand, but not enough USDC to process the current withdrawal frenzy. So they have to go to their redemption bridge and convert their cash back to USDC. As such, the explanation given by CZ is very plausible. - Withdrawal suspensions are not an uncommon occurrence on Binance, or any other exchange for that matter. You are only noticing this now because the market participants suffer from PTSD from other exchanges going under and the effect of the news is amplified. - The fear seems to be largely coming from people associating the withdrawal suspension with the recent FTX fiasco. However, and especially without understanding the context of those suspensions, its important to remember - correlation does not mean causation. - It also comes from people expecting Binance to have USDC at 1:1 ratio liquid, but thats not the case due to the auto conversion mentioned, and explained, by Binance. - Its also worth noting that BUSD is not a Binance product. Its managed by Paxos, which is a separate entity. Ultimately, the r/r here is clear: it takes little effort to withdraw and stay safe, but the downside is huge if Binance goes under. So its natural for people to decide to withdraw even when chances of it blowing up are slim. Withdraw your coins if you are worried, preferably via fiat to a bank. But, please, don't go around spreading panic about things you don't understand or lack the context to judge.
- janmo 4y agoFTX a few days before going belly up: "Stablecoins: processing. Banks are closed for the weekend, though; USD <> stablecoin creations/redemptions might be slower until wires clear tomorrow, especially for some coins/chains." https://twitter.com/FTX_Official/status/1589510763328450561 https://twitter.com/FTX_Official/status/1589510763328450561 I also I would like to add that: - USDC on Binance is not 1:1 backed by USDC, but by another stable coin such as BUSD or perhaps even USDT. Both of them are much harder to convert into real dollars! - Binance is obviously not prepared for a bank run, this is happening on a Monday/Tuesday, not even a weekend, and the withdrawals issued started yesterday while the banks where open! As of this post, USDC withdrawals have been suspended for at least 14 hours! Source: https://twitter.com/Cryptolicious9/status/1602411551751024640 https://twitter.com/Cryptolicious9/status/160241155175102464...
- not_gpt4 4y agoFortune favours the skills that can spin up a node.
- beaker52 4y agoAs an observer, the schadenfreude around crypto is unreal. If you want to see crypto fail, and jump on opportunities to spread FUD, to eventually prove your position and briefly smugly walk around saying "I told you so", then that's disgraceful.
- hocuspocus 4y agoWell, we're just having fun staying poor.
- beaker52 4y agoDon’t spend your time in this world bringing people down to prevent them from climbing higher than you. Lift them up. You’ll know you’ve got it right when they reach back down and give you a hand up. Your character is yours alone to write.
- hocuspocus 4y agoEither you don't understand your own words, or you don't understand who's truly getting rich from cryptocurrency speculation, or maybe both. Either way I had a good laugh, thanks.
- flumpcakes 4y agoIn related crypto news, Sam Bankman-Fried has been arrested: https://www.bbc.co.uk/news/business-63953096 https://www.bbc.co.uk/news/business-63953096 and South Korea thinks they know where Do Kwon is https://www.bbc.co.uk/news/business-63940181 https://www.bbc.co.uk/news/business-63940181
- firstSpeaker 4y agoTime has come for Binance?