4 ms·

So here’s where there might be some confusion, Binance consolidates a pool of different stable coins into 1 “BUSD” balance for its users[0]. Depositing any of t

So here’s where there might be some confusion, Binance consolidates a pool of different stable coins into 1 “BUSD” balance for its users[0]. Depositing any of these stablecoins into Binance will add to your BUSD balance, and you can withdraw from it as any stablecoin of your choice. What CZ is saying is that they ran out of USDC but have plenty of the other stablecoins instead. It sounds like they need to redeem the other stablecoins to fiat USD and send it to Circle to mint USDC with it, hence the talk about the bank. [0]https://www.binance.com/en/support/announcement/binance-to-auto-convert-usdc-usdp-tusd-to-busd-binance-usd-e62f703604a94538a1f1bc803b2d579f https://www.binance.com/en/support/announcement/binance-to-a...

kikokikokiko 4y ago
So, they need to find gullible 3rd parties that accept to give them hard cash (USD) in exchange for their in house created clown money (BUSD), and then use this hard cash to go to the market and buy USDC. How is this different from FTX padding their balance sheet with billions of their own made up clown money? Crypto is ponzies all the way down.
- MacsHeadroom 4y ago
  BUSD is not clown money or created by Binance. It is the most highly regulated financial instrument in crypto, issued by Paxos New York, tightly regulated by NYDFS, backed 1:1 and regularly audited. https://paxos.com/busd/ https://paxos.com/busd/
  - kikokikokiko 4y ago
    So, it's just like the deposits on FTX, or the reserves of Tether right?
    - danuker 4y ago
      Yes, on a centralized entity you're required to trust ("we're totally backed by cash and bonds, for realsies"), as opposed to owning and holding your crypto outright. From their web page: > Transparent > A top auditing firm will attest to the matching supply of BUSD tokens and underlying U.S. dollars on a monthly basis. Note the future tense, as in, "sometime indefinitely away in the future". Their attestations (as opposed to audits) just say that at a certain instant in time they had the required amount in a bank account. That means Paxos could have borrowed it for a short while. Quote [1]: "Any activity prior to or after the Report Dates and Times at 5:00 pm ET was not considered when testing the assertions described above." This is the same trick pointed out by Coffeezilla about a year ago, about Tether. [2] And the one from November is missing. [1] - https://paxos.com/wp-content/uploads/2022/10/Executed-BUSD-Examination-Report-October-2022-2.pdf https://paxos.com/wp-content/uploads/2022/10/Executed-BUSD-E... [2] - https://www.youtube.com/watch?v=-whuXHSL1Pg https://www.youtube.com/watch?v=-whuXHSL1Pg
      - CTDOCodebases 4y ago
        Yes this is the issue with attestations. They tell people how much you hold without telling them how much you owe. For all anyone knows the assets held could be collateral for a large overdue loan.
    - MacsHeadroom 4y ago
      FTX international was not regulated and Tether is debt backed. So no it's not like either of those things.
      - kikokikokiko 4y ago
        Binance is regulated where exactly? Can you please point me to the jurisdiction where it's offices are located, so I can instruct my lawyers to send them some papers? Just asking in case something happens in the future.
        MacsHeadroom 4y ago
        BUSD is not a Binance product, it is a Paxos product [0] regulated by the New York State Department of Financial Services. Binance merely pays to have their name on it. [1] Here is the specific NYDFS guidance on Paxos' issuance of stablecoins. [2] And here is a link to their NYDFS appointed third-party auditory accounting firm. Complaints against Paxos can be filed with the New York State Department of Financial Services at: One State Street New York, NY 10004 --- OR with Paxos directly at 450 Lexington Ave Suite 3952 New York, NY 10163 --- [0] https://paxos.com/busd/ https://paxos.com/busd/ [1] https://www.dfs.ny.gov/industry_guidance/industry_letters/il20220608_issuance_stablecoins https://www.dfs.ny.gov/industry_guidance/industry_letters/il... [2] https://www.withum.com/ https://www.withum.com/
        kikokikokiko 4y ago
        So in an eventual future where BINANCE stops allowing people to withdraw their BUSD, I can go to Paxos door and complain about it? Will my clown USD be returned to me?
  - atarashi 4y ago
    Let me add: Only BUSD on Ethereum (ERC-20) is issued by Paxos. The BUSD on the BNB Chain (BEP-20) is not affiliated with Paxos and not regulated by NYDFS. Quoting Paxos: "BUSD is issued by Paxos on the Ethereum blockchain and regulated by the New York Department of Financial Services. Separately, Binance wraps BUSD and issues separate tokens (known as Binance-Peg BUSD) on several blockchains, including BNB Smart Chain, Polygon, and Avalanche. These tokens are unaffiliated with Paxos and not regulated by the NYDFS."
    - matthewdgreen 4y ago
      Yes, but I believe that this "wrapping" should be visible on chain. In the sense that there should be a 1:1 mapping between "real" BUSD locked on Ethereum and the number of pegged BUSD on other chains, and that the accounting can be verified in real time. But I haven't verified.
      - nibbleshifter 4y ago
        > But I haven't verified. Offhand, I can't think of a fast and easy way to verify this reliably.
        matthewdgreen 4y ago
        I visited Binance's main page on BUSD [1] and it suggests you go look at their proof-of-reserves page [2], which lists the exact number of each token on Ethereum (5,334,500,000), BNB (5,315,999,056), Avalanche (11,500,000) and Polygon (6,000,000), each with links to block explorers. Note that if everything adds up, this total leaves 1,000,944 tokens on Ethereum, but at least that's positive. Edit: I spent some time thinking the Ethereum number was the total number of BUSD, but apparently it is Binance's holdings which can be found in a wallet nicknamed "Binance: Binance-Peg Tokens" on Etherscan [3]. Since this number is greater than the total number of pegged tokens, I guess everything adds up. (Of course, since the "cross-chain peg" here is implemented in a centralized way by Binance, it could de-peg at any point they want it to.) [1] https://www.binance.com/en/blog/ecosystem/understanding-busd-and-binancepeg-busd-5526464425033159282 https://www.binance.com/en/blog/ecosystem/understanding-busd... [2] https://www.binance.com/en/collateral-btokens https://www.binance.com/en/collateral-btokens [3] https://etherscan.io/address/0x47ac0fb4f2d84898e4d9e7b4dab3c24507a6d503 https://etherscan.io/address/0x47ac0fb4f2d84898e4d9e7b4dab3c...

kikokikokiko 4y ago

So, they need to find gullible 3rd parties that accept to give them hard cash (USD) in exchange for their in house created clown money (BUSD), and then use this hard cash to go to the market and buy USDC. How is this different from FTX padding their balance sheet with billions of their own made up clown money? Crypto is ponzies all the way down.

MacsHeadroom 4y ago
BUSD is not clown money or created by Binance. It is the most highly regulated financial instrument in crypto, issued by Paxos New York, tightly regulated by NYDFS, backed 1:1 and regularly audited. https://paxos.com/busd/ https://paxos.com/busd/
- kikokikokiko 4y ago
  So, it's just like the deposits on FTX, or the reserves of Tether right?
  - danuker 4y ago
    Yes, on a centralized entity you're required to trust ("we're totally backed by cash and bonds, for realsies"), as opposed to owning and holding your crypto outright. From their web page: > Transparent > A top auditing firm will attest to the matching supply of BUSD tokens and underlying U.S. dollars on a monthly basis. Note the future tense, as in, "sometime indefinitely away in the future". Their attestations (as opposed to audits) just say that at a certain instant in time they had the required amount in a bank account. That means Paxos could have borrowed it for a short while. Quote [1]: "Any activity prior to or after the Report Dates and Times at 5:00 pm ET was not considered when testing the assertions described above." This is the same trick pointed out by Coffeezilla about a year ago, about Tether. [2] And the one from November is missing. [1] - https://paxos.com/wp-content/uploads/2022/10/Executed-BUSD-Examination-Report-October-2022-2.pdf https://paxos.com/wp-content/uploads/2022/10/Executed-BUSD-E... [2] - https://www.youtube.com/watch?v=-whuXHSL1Pg https://www.youtube.com/watch?v=-whuXHSL1Pg
    - CTDOCodebases 4y ago
      Yes this is the issue with attestations. They tell people how much you hold without telling them how much you owe. For all anyone knows the assets held could be collateral for a large overdue loan.
  - MacsHeadroom 4y ago
    FTX international was not regulated and Tether is debt backed. So no it's not like either of those things.
    - kikokikokiko 4y ago
      Binance is regulated where exactly? Can you please point me to the jurisdiction where it's offices are located, so I can instruct my lawyers to send them some papers? Just asking in case something happens in the future.
      - MacsHeadroom 4y ago
        BUSD is not a Binance product, it is a Paxos product [0] regulated by the New York State Department of Financial Services. Binance merely pays to have their name on it. [1] Here is the specific NYDFS guidance on Paxos' issuance of stablecoins. [2] And here is a link to their NYDFS appointed third-party auditory accounting firm. Complaints against Paxos can be filed with the New York State Department of Financial Services at: One State Street New York, NY 10004 --- OR with Paxos directly at 450 Lexington Ave Suite 3952 New York, NY 10163 --- [0] https://paxos.com/busd/ https://paxos.com/busd/ [1] https://www.dfs.ny.gov/industry_guidance/industry_letters/il20220608_issuance_stablecoins https://www.dfs.ny.gov/industry_guidance/industry_letters/il... [2] https://www.withum.com/ https://www.withum.com/
        kikokikokiko 4y ago
        So in an eventual future where BINANCE stops allowing people to withdraw their BUSD, I can go to Paxos door and complain about it? Will my clown USD be returned to me?
- atarashi 4y ago
  Let me add: Only BUSD on Ethereum (ERC-20) is issued by Paxos. The BUSD on the BNB Chain (BEP-20) is not affiliated with Paxos and not regulated by NYDFS. Quoting Paxos: "BUSD is issued by Paxos on the Ethereum blockchain and regulated by the New York Department of Financial Services. Separately, Binance wraps BUSD and issues separate tokens (known as Binance-Peg BUSD) on several blockchains, including BNB Smart Chain, Polygon, and Avalanche. These tokens are unaffiliated with Paxos and not regulated by the NYDFS."
  - matthewdgreen 4y ago
    Yes, but I believe that this "wrapping" should be visible on chain. In the sense that there should be a 1:1 mapping between "real" BUSD locked on Ethereum and the number of pegged BUSD on other chains, and that the accounting can be verified in real time. But I haven't verified.
    - nibbleshifter 4y ago
      > But I haven't verified. Offhand, I can't think of a fast and easy way to verify this reliably.
      - matthewdgreen 4y ago
        I visited Binance's main page on BUSD [1] and it suggests you go look at their proof-of-reserves page [2], which lists the exact number of each token on Ethereum (5,334,500,000), BNB (5,315,999,056), Avalanche (11,500,000) and Polygon (6,000,000), each with links to block explorers. Note that if everything adds up, this total leaves 1,000,944 tokens on Ethereum, but at least that's positive. Edit: I spent some time thinking the Ethereum number was the total number of BUSD, but apparently it is Binance's holdings which can be found in a wallet nicknamed "Binance: Binance-Peg Tokens" on Etherscan [3]. Since this number is greater than the total number of pegged tokens, I guess everything adds up. (Of course, since the "cross-chain peg" here is implemented in a centralized way by Binance, it could de-peg at any point they want it to.) [1] https://www.binance.com/en/blog/ecosystem/understanding-busd-and-binancepeg-busd-5526464425033159282 https://www.binance.com/en/blog/ecosystem/understanding-busd... [2] https://www.binance.com/en/collateral-btokens https://www.binance.com/en/collateral-btokens [3] https://etherscan.io/address/0x47ac0fb4f2d84898e4d9e7b4dab3c24507a6d503 https://etherscan.io/address/0x47ac0fb4f2d84898e4d9e7b4dab3c...