4 ms·

Banks 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 withdr

by hef19898 4y ago

Banks 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.

charcircuit 4y ago
>And I never heard of actual banks limiting or even pausing withdrawls Most banks pause withdrawals every night. They are only open during the day. You can't just show up at 2 am and be able to withdraw 10 million dollars.
- ohgodplsno 4y ago
  I can withdraw 1k at 2AM in any ATM in the world. The only reason why you can't withdraw 10 million at that time is purely for KYC purposes. Withdrawals aren't paused because the bank doesn't have the money, merely because there's noone physically present to handle it (partly because, even with 10 millions, you're not worth the time of an employee, and because nobody _needs_ to withdraw 10 million suddenly in the middle of the night)
  - hef19898 4y ago
    You could, following regulatory and bank internal processes, trabsfer those ten million in one go to any bank account in the world so. Assuming you have internet and a phone. It is not like Binace is limiting cash withdrawls, they a halting wire trabsfers. For me that's a dead sign the money isn't there anymore.
  - charcircuit 4y ago
    >Withdrawals aren't paused because the bank doesn't have the money, merely because there's noone physically present to handle it Which is what is happening to Binance.
    - hef19898 4y ago
      Impossible to tell apart without properly prepared, and audited, balance sheets.
    - ohgodplsno 4y ago
      No. When I can't withdraw, it's because my bank teller is sleeping. Binance has a bank teller, but he's telling you "uh hold on we need to buy your money from another teller that's sleeping because we don't actually have it. Do you want to get our monopoly money instead?" Binance is about to pull the rug.
      - eternalban 4y ago
        Is the tweet then a canary in the coal mine signal for special friends that can’t be called directly?
FBISurveillance 4y ago
"legally guaranteed deposit insurance" up to insurance limit. You're not always guaranteed to get all your money back. Disclaimer: not defending Binance, not into crypto, just a note.
- hef19898 4y ago
  Depending on jurisdiction, and your net worth in cash deposits, well you very well are. In the EU each single account is guaranteed up to 100k Euro cash, anything above that is quite often subject to bank specifoc guarabtees and insurances. Also, banks are, since 2008, undergoing regular stress tests. They always have published audited balance sheets, have rules and regulations around the use of customer deposits, which again are controlled. Heck, even during the Wirecard collapse nobody lost deposited money as far as I am aware. As soon as a bank fails to provide audited balance sheets, authoroties can step in and halt operations. Mainly to make sure customers deposits are still there and can be withdrawn by the legal owners. It is almost hilarious how Crypto is relearning, at a redicioulous pace, all the lessons tradotional finance and banks learned over the last 100 odd years. And still fails to see that all the answers are already there. In a sense, it is almost peak start-up cliche disruption. Can almost be a good thing so.
Galanwe 4y ago
How did you end up comparing Binance to a bank? The closest equivalent to what Binance is would be a broker. Now I challenge you to find any broker on the planet that can promise instant FX swap settlement on the same day for a cash account. Don't compare apples and bananas.
- hef19898 4y ago
  If I have someobe holding my crypto currency, that is as close to a crypto bank as it gets. Otherwise crypto woupdn't be money but some form of security. In which case, one has to ask, it is not regulated as such. And show me one broker that refused, regardless of transaction fees or other contractual stuff, customer wothdraels of funds. Other than those brokers that actually "lost" customer funds. Which is, by the way, also fraud.
  - notpushkin 4y ago
    So if a securities broker is holding my USD, does this make USD a form of security and specifically not money?
  - Galanwe 4y ago
    > If I have someobe holding my crypto currency, that is as close to a crypto bank as it gets. You don't get to define what is a bank, and "anyone holding my money" is definitely far from the definition of a bank. USDC is _not_ USD. When you deposit 100 USDC to Binance and ask to withdraw USD, you are effectively making an FX swap between two currencies, even if these currencies are 1:1 pegged. Again, there is simply no broker on the planet that will do that instantaneously. USD is 1 day settlement, you just won't get any better than that, unless the broker accepts to take the counterparty risk of paying you upfront. No existing broker will do that for any substantial amount.
    - imtringued 4y ago
      Ok but there is a big problem with your argument. If that is the case why did the Binance CEO have to make an announcement on Twitter if the business terms already include that USDC to USD settlement takes a business day? The banks being "late" is not unusual, it would happen every single day.
ls15 4y ago
I've seen a bank branch being temporarily out of cash and hence pausing withdrawals in a relatively functioning economy before. Happens. ATMs at my bank in Germany were down because of a strike.
- hef19898 4y ago
  But we still could transfer money out to other accounts at other banks, couldn't we? And that is what those crypto exchanges are blocking.
  - ls15 4y ago
    Crypto exchanges need sophisticated hot/cold wallet management for security. Hot storage is their equivalent to cash on hand. Hot storage can be quickly depleted. If a crypto exchange just disables withdrawals of one asset, users technically still can sell it for BTC, ETH or another stablecoin and withdraw that. Sometimes my banking website is down for maintenance.

charcircuit 4y ago

>And I never heard of actual banks limiting or even pausing withdrawls Most banks pause withdrawals every night. They are only open during the day. You can't just show up at 2 am and be able to withdraw 10 million dollars.

ohgodplsno 4y ago
I can withdraw 1k at 2AM in any ATM in the world. The only reason why you can't withdraw 10 million at that time is purely for KYC purposes. Withdrawals aren't paused because the bank doesn't have the money, merely because there's noone physically present to handle it (partly because, even with 10 millions, you're not worth the time of an employee, and because nobody _needs_ to withdraw 10 million suddenly in the middle of the night)
- hef19898 4y ago
  You could, following regulatory and bank internal processes, trabsfer those ten million in one go to any bank account in the world so. Assuming you have internet and a phone. It is not like Binace is limiting cash withdrawls, they a halting wire trabsfers. For me that's a dead sign the money isn't there anymore.
- charcircuit 4y ago
  >Withdrawals aren't paused because the bank doesn't have the money, merely because there's noone physically present to handle it Which is what is happening to Binance.
  - hef19898 4y ago
    Impossible to tell apart without properly prepared, and audited, balance sheets.
  - ohgodplsno 4y ago
    No. When I can't withdraw, it's because my bank teller is sleeping. Binance has a bank teller, but he's telling you "uh hold on we need to buy your money from another teller that's sleeping because we don't actually have it. Do you want to get our monopoly money instead?" Binance is about to pull the rug.
    - eternalban 4y ago
      Is the tweet then a canary in the coal mine signal for special friends that can’t be called directly?

FBISurveillance 4y ago

"legally guaranteed deposit insurance" up to insurance limit. You're not always guaranteed to get all your money back. Disclaimer: not defending Binance, not into crypto, just a note.

hef19898 4y ago
Depending on jurisdiction, and your net worth in cash deposits, well you very well are. In the EU each single account is guaranteed up to 100k Euro cash, anything above that is quite often subject to bank specifoc guarabtees and insurances. Also, banks are, since 2008, undergoing regular stress tests. They always have published audited balance sheets, have rules and regulations around the use of customer deposits, which again are controlled. Heck, even during the Wirecard collapse nobody lost deposited money as far as I am aware. As soon as a bank fails to provide audited balance sheets, authoroties can step in and halt operations. Mainly to make sure customers deposits are still there and can be withdrawn by the legal owners. It is almost hilarious how Crypto is relearning, at a redicioulous pace, all the lessons tradotional finance and banks learned over the last 100 odd years. And still fails to see that all the answers are already there. In a sense, it is almost peak start-up cliche disruption. Can almost be a good thing so.

Galanwe 4y ago

How did you end up comparing Binance to a bank? The closest equivalent to what Binance is would be a broker. Now I challenge you to find any broker on the planet that can promise instant FX swap settlement on the same day for a cash account. Don't compare apples and bananas.

hef19898 4y ago
If I have someobe holding my crypto currency, that is as close to a crypto bank as it gets. Otherwise crypto woupdn't be money but some form of security. In which case, one has to ask, it is not regulated as such. And show me one broker that refused, regardless of transaction fees or other contractual stuff, customer wothdraels of funds. Other than those brokers that actually "lost" customer funds. Which is, by the way, also fraud.
- notpushkin 4y ago
  So if a securities broker is holding my USD, does this make USD a form of security and specifically not money?
- Galanwe 4y ago
  > If I have someobe holding my crypto currency, that is as close to a crypto bank as it gets. You don't get to define what is a bank, and "anyone holding my money" is definitely far from the definition of a bank. USDC is _not_ USD. When you deposit 100 USDC to Binance and ask to withdraw USD, you are effectively making an FX swap between two currencies, even if these currencies are 1:1 pegged. Again, there is simply no broker on the planet that will do that instantaneously. USD is 1 day settlement, you just won't get any better than that, unless the broker accepts to take the counterparty risk of paying you upfront. No existing broker will do that for any substantial amount.
  - imtringued 4y ago
    Ok but there is a big problem with your argument. If that is the case why did the Binance CEO have to make an announcement on Twitter if the business terms already include that USDC to USD settlement takes a business day? The banks being "late" is not unusual, it would happen every single day.

ls15 4y ago

I've seen a bank branch being temporarily out of cash and hence pausing withdrawals in a relatively functioning economy before. Happens. ATMs at my bank in Germany were down because of a strike.

hef19898 4y ago
But we still could transfer money out to other accounts at other banks, couldn't we? And that is what those crypto exchanges are blocking.
- ls15 4y ago
  Crypto exchanges need sophisticated hot/cold wallet management for security. Hot storage is their equivalent to cash on hand. Hot storage can be quickly depleted. If a crypto exchange just disables withdrawals of one asset, users technically still can sell it for BTC, ETH or another stablecoin and withdraw that. Sometimes my banking website is down for maintenance.