6 ms·

Alternative title: "Binance successfully clears $12B in liabilities in under 60 days"

timerol 4y ago
I'd prefer "Binance processes $12B in withdrawals in under 60 days". It's newsworthy both because total assets invested in crypto is falling, and because Binance is still processing withdrawals successfully after over 15% of AUM were withdrawn.
- MuffinFlavored 4y ago
  What’s their AUM now? Do we know it?
  - olalonde 4y ago
    AUC (Assets Under Custody) would be a more accurate term here.
trog 4y ago
Sure, but - Binance will successfully be able to clear their liabilities right up until the first person tries to withdraw a single dollar and it fails because they don't have any left. At which point it will probably go to zero in an unrecoverable way. One of the big issues with Binance (as I understand it, as a mere tourist) is that /nobody knows/ how much actual money they have. They might have $12B + $1, or they might have $60B, or whatever. There is a lot of faith, backed by little evidence, that they have enough actual capital to cover their liabilities.
- eaurouge 4y ago
  You have zero visibility into the operations of traditional private businesses. With Binance, you can at least view their wallet balances, in the 10s of billions. You can also estimate their annual revenues. I would recommend doing both. You may find it illuminating. Really, we should all try similar research before commenting on crypto. It would make for much more intelligent discussions. And I don’t mean to pick on you. But too often I read comments here like: “I don’t know much about crypto, but I’m confident that … (insert choice assertion)”.
  - MuffinFlavored 4y ago
    I have zero visibility into the 500 companies in the S&P?
    - ShivShankaran 4y ago
      [dead]
    - alvah 4y ago
      I think that's why parent says "private businesses", as opposed to public companies.
  - deleted 4y ago
    [deleted]
  - trog 4y ago
    > You have zero visibility into the operations of traditional private businesses. If you need visibility into a private business for commercial reasons before doing business with them, there are ways to do it, including using auditors in the same way Binance did [before their auditors abandoned them for reasons]. Companies that engage private companies do this kind of thing all the time as part of due diligence (e.g. engaging a vendor on a critical project & ensuring they're going to be able to deliver). > With Binance, you can at least view their wallet balances, in the 10s of billions. I mean, you're describing the problem! Their wallet balances are irrelevant - it's their bank balances that we're interested in. I can create a wallet with any arbitrary cryptoasset of my own invention & put "10s of billions" of coins in there and claim they're backed 1:1 with some real currency. Until I can provide reliable evidence that I actually have the currency, it would be insane to believe me, right? And this is the situation Binance is in - the state of their actual real-world finances is, and has been for as long as I can remember, questionable. (Arguably, I'd say it's worse now that Mazars have dropped them!) It's neat they've managed to be liquid for the last few months during this latest crytopocalypse. But I stand by my first comment - they'll have the appearance of being completely fine, right up until the point that they're not. Like every single other exchange. > And I don’t mean to pick on you. None taken. I described myself as a 'mere tourist' because I hold no cryptoassets (except for some Stellar I got more or less accidentally in the Keybase drop), but I have been following the space since the release of the Bitcoin whitepaper.
- ratg13 4y ago
  You are describing every privately held company on the planet.
  - phs318u 4y ago
    Your comment triggered a question in my mind and searching isn't helping find a convincing answer. Does anyone know the size of the largest privately-owned retail bank operating in the world? I believe CTBC Bank (Taiwan) is privately-held, but I don't know of any others. Having worked for a few banks in Australia, I took it as axiomatic that banks were publicly listed companies. But who knows? Maybe not.
    - ldbooth 4y ago
      I'd throw Fidelity into that category but I don't know the assets under mgmgt., Just they are huge, private, and more and more offer retail like online banking with some physical locations that are more investment-advisor oriented.
      - __derek__ 4y ago
        Notably, Fidelity shunts virtually all customer deposits off into separate institutions: FDIC member banks (Fidelity doesn't own one) or Fidelity money market funds (legally separate companies who custody their assets elsewhere). It's technically possible to deposit cash with Fidelity itself (FCASH[1]), but (a) that option is not the default and (b) the interest paid is significantly lower. [1]: https://www.fidelity.com/trading/faqs-about-account#faq_about2 https://www.fidelity.com/trading/faqs-about-account#faq_abou...
deleted 4y ago
[deleted]
1vuio0pswjnm7 4y ago
Not everyone who invested with Madoff lost money. One client withdrew his funds long before Madoff was found out. With respect to this one customer, Madoff's service "successfully cleared $5.1 billion in liablities". https://www.propublica.org/article/madoff-client-jeffry-picower-netted-5-billion https://www.propublica.org/article/madoff-client-jeffry-pico... This is not where the story ends though. Eventually Picower (his widow) had to forfeit his gains from Madoff's account where all customer deposits were pooled, because let's be honest, it was not Picower's money. https://archive.boston.com/business/articles/2010/12/18/picower_estate_adds_72b_to_madoff_fund/ https://archive.boston.com/business/articles/2010/12/18/pico... It is only a matter of time with Binance. The story is still unfolding.
- cyanydeez 4y ago
  Think all the politicians FTX bought will give up their donations?
  - 1vuio0pswjnm7 4y ago
    Perhaps not all, but certainly some. Several have already returned funds, others are making arrangements. If not returned then equal donations will be made to charities. https://news.yahoo.com/politicians-giving-back-donations-disgraced-210759416.html https://news.yahoo.com/politicians-giving-back-donations-dis... https://www.nbcnews.com/politics/2022-election/candidates-backed-ftxs-sam-bankman-fried-pledge-donate-campaign-cash-rcna61652 https://www.nbcnews.com/politics/2022-election/candidates-ba... https://www.politico.com/news/2022/11/15/lawmakers-return-ftx-money-00067009 https://www.politico.com/news/2022/11/15/lawmakers-return-ft... https://www.forbes.com/sites/jayadkisson/2022/12/23/why-the-political-campaigns-that-received-ftx-donations-will-have-to-pay-those-funds-back-to-ftx/ https://www.forbes.com/sites/jayadkisson/2022/12/23/why-the-... https://www.washingtonexaminer.com/news/ftx-plans-to-claw-back-bankman-frieds-donations https://www.washingtonexaminer.com/news/ftx-plans-to-claw-ba... https://www.businessinsider.com/sbf-ftx-charity-politicians-bankruptcy-clawback-targets-fraudulent-transfer-2022-11?op=1 https://www.businessinsider.com/sbf-ftx-charity-politicians-... https://www.wsj.com/articles/ftx-seeks-to-recoup-sam-bankman-frieds-charitable-donations-11673049354 https://www.wsj.com/articles/ftx-seeks-to-recoup-sam-bankman...
deleted 4y ago
[deleted]

I'd prefer "Binance processes $12B in withdrawals in under 60 days". It's newsworthy both because total assets invested in crypto is falling, and because Binance is still processing withdrawals successfully after over 15% of AUM were withdrawn.

MuffinFlavored 4y ago
What’s their AUM now? Do we know it?
- olalonde 4y ago
  AUC (Assets Under Custody) would be a more accurate term here.

trog 4y ago

Sure, but - Binance will successfully be able to clear their liabilities right up until the first person tries to withdraw a single dollar and it fails because they don't have any left. At which point it will probably go to zero in an unrecoverable way. One of the big issues with Binance (as I understand it, as a mere tourist) is that /nobody knows/ how much actual money they have. They might have $12B + $1, or they might have $60B, or whatever. There is a lot of faith, backed by little evidence, that they have enough actual capital to cover their liabilities.

eaurouge 4y ago
You have zero visibility into the operations of traditional private businesses. With Binance, you can at least view their wallet balances, in the 10s of billions. You can also estimate their annual revenues. I would recommend doing both. You may find it illuminating. Really, we should all try similar research before commenting on crypto. It would make for much more intelligent discussions. And I don’t mean to pick on you. But too often I read comments here like: “I don’t know much about crypto, but I’m confident that … (insert choice assertion)”.
- MuffinFlavored 4y ago
  I have zero visibility into the 500 companies in the S&P?
  - ShivShankaran 4y ago
    [dead]
  - alvah 4y ago
    I think that's why parent says "private businesses", as opposed to public companies.
- deleted 4y ago
  [deleted]
- trog 4y ago
  > You have zero visibility into the operations of traditional private businesses. If you need visibility into a private business for commercial reasons before doing business with them, there are ways to do it, including using auditors in the same way Binance did [before their auditors abandoned them for reasons]. Companies that engage private companies do this kind of thing all the time as part of due diligence (e.g. engaging a vendor on a critical project & ensuring they're going to be able to deliver). > With Binance, you can at least view their wallet balances, in the 10s of billions. I mean, you're describing the problem! Their wallet balances are irrelevant - it's their bank balances that we're interested in. I can create a wallet with any arbitrary cryptoasset of my own invention & put "10s of billions" of coins in there and claim they're backed 1:1 with some real currency. Until I can provide reliable evidence that I actually have the currency, it would be insane to believe me, right? And this is the situation Binance is in - the state of their actual real-world finances is, and has been for as long as I can remember, questionable. (Arguably, I'd say it's worse now that Mazars have dropped them!) It's neat they've managed to be liquid for the last few months during this latest crytopocalypse. But I stand by my first comment - they'll have the appearance of being completely fine, right up until the point that they're not. Like every single other exchange. > And I don’t mean to pick on you. None taken. I described myself as a 'mere tourist' because I hold no cryptoassets (except for some Stellar I got more or less accidentally in the Keybase drop), but I have been following the space since the release of the Bitcoin whitepaper.
ratg13 4y ago
You are describing every privately held company on the planet.
- phs318u 4y ago
  Your comment triggered a question in my mind and searching isn't helping find a convincing answer. Does anyone know the size of the largest privately-owned retail bank operating in the world? I believe CTBC Bank (Taiwan) is privately-held, but I don't know of any others. Having worked for a few banks in Australia, I took it as axiomatic that banks were publicly listed companies. But who knows? Maybe not.
  - ldbooth 4y ago
    I'd throw Fidelity into that category but I don't know the assets under mgmgt., Just they are huge, private, and more and more offer retail like online banking with some physical locations that are more investment-advisor oriented.
    - __derek__ 4y ago
      Notably, Fidelity shunts virtually all customer deposits off into separate institutions: FDIC member banks (Fidelity doesn't own one) or Fidelity money market funds (legally separate companies who custody their assets elsewhere). It's technically possible to deposit cash with Fidelity itself (FCASH[1]), but (a) that option is not the default and (b) the interest paid is significantly lower. [1]: https://www.fidelity.com/trading/faqs-about-account#faq_about2 https://www.fidelity.com/trading/faqs-about-account#faq_abou...

deleted 4y ago

[deleted]

1vuio0pswjnm7 4y ago

Not everyone who invested with Madoff lost money. One client withdrew his funds long before Madoff was found out. With respect to this one customer, Madoff's service "successfully cleared $5.1 billion in liablities". https://www.propublica.org/article/madoff-client-jeffry-picower-netted-5-billion https://www.propublica.org/article/madoff-client-jeffry-pico... This is not where the story ends though. Eventually Picower (his widow) had to forfeit his gains from Madoff's account where all customer deposits were pooled, because let's be honest, it was not Picower's money. https://archive.boston.com/business/articles/2010/12/18/picower_estate_adds_72b_to_madoff_fund/ https://archive.boston.com/business/articles/2010/12/18/pico... It is only a matter of time with Binance. The story is still unfolding.

cyanydeez 4y ago
Think all the politicians FTX bought will give up their donations?
- 1vuio0pswjnm7 4y ago
  Perhaps not all, but certainly some. Several have already returned funds, others are making arrangements. If not returned then equal donations will be made to charities. https://news.yahoo.com/politicians-giving-back-donations-disgraced-210759416.html https://news.yahoo.com/politicians-giving-back-donations-dis... https://www.nbcnews.com/politics/2022-election/candidates-backed-ftxs-sam-bankman-fried-pledge-donate-campaign-cash-rcna61652 https://www.nbcnews.com/politics/2022-election/candidates-ba... https://www.politico.com/news/2022/11/15/lawmakers-return-ftx-money-00067009 https://www.politico.com/news/2022/11/15/lawmakers-return-ft... https://www.forbes.com/sites/jayadkisson/2022/12/23/why-the-political-campaigns-that-received-ftx-donations-will-have-to-pay-those-funds-back-to-ftx/ https://www.forbes.com/sites/jayadkisson/2022/12/23/why-the-... https://www.washingtonexaminer.com/news/ftx-plans-to-claw-back-bankman-frieds-donations https://www.washingtonexaminer.com/news/ftx-plans-to-claw-ba... https://www.businessinsider.com/sbf-ftx-charity-politicians-bankruptcy-clawback-targets-fraudulent-transfer-2022-11?op=1 https://www.businessinsider.com/sbf-ftx-charity-politicians-... https://www.wsj.com/articles/ftx-seeks-to-recoup-sam-bankman-frieds-charitable-donations-11673049354 https://www.wsj.com/articles/ftx-seeks-to-recoup-sam-bankman...

deleted 4y ago

[deleted]