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The context is that the Japanese regulator, FSA (Financial Services Agency) which regulates Banks, Cyrpto, and Brokerages is scary. Notice how Coinbases stateme
by Danieru 4y ago
The context is that the Japanese regulator, FSA (Financial Services Agency) which regulates Banks, Cyrpto, and Brokerages is scary. Notice how Coinbases statement is quick to reassure no Japanese assets have been comingled.
Not Americans assets, or anyone else. Coinbase is careful to only mention Japanese assets.
The FSA regulated FTX Japan is the only regional FTX moving forward with returning depositor's assets. FTX US's status is disputed, certainly not issuing a timeline.
The collapse of Mt. Gox pushed the FSA to heavily regulate crypto. Of course that means an entity like Coinbase must consider not just the cost of compliance, but also the risk that if they steal customer funds executives can go to jail. Costs are fine, investors bear that. But clearly Coinbases executives most dislike the whole "FSA will haul you into jail for questioning when you loss customer money" most. Hence this announcement.
At this point any exchange avoiding FSA regulation is a giant red flag with bonus red siren.
- SkyMarshal 4y ago> Not Americans assets, or anyone else. Coinbase is careful to only mention Japanese assets. Fwiw, Brian Armstrong clearly asserts in this recent interview that Coinbase assets in general are not commingled: https://www.youtube.com/watch?v=dueFaHFulVA&t=3m35s https://www.youtube.com/watch?v=dueFaHFulVA&t=3m35s There's no evasive language or weasel words or anything like that, it's a straight up commitment, backed by the fact that Coinbase is a public company and subject to that level of auditing, transparency, and scrutiny.
- bmitc 4y agoThanks for the context on the FSA. I was unaware of Japan’s regulation stance.
- Animats 4y ago> At this point any exchange avoiding FSA regulation is a giant red flag with bonus red siren. Yes. No crypto exchange can make money without either charging fees or ripping off the customers. The less legitimate ones just steal the customers' money. The more legitimate ones try to steer the customers into buying financial products profitable to the seller. Useful rule of thumb: any financial product where they call or advertise to you is no good. If it was good, smart money would be seeking it out and buying it.
- godzillabrennus 4y agoCoinbase is well known for charging fees higher than competitors. Even with those fees they still lost around 500 million dollars in 2022 operating their exchange.
- rswskg 4y agoI'm left wondering how they managed to lose that much?
- shapefrog 4y agoThe timing of great profit and loss for coinbase strongly suggest that they hold long crypto positions on their balance sheet.
- drexlspivey 4y agoThat’s not how income statements work..
- shapefrog 4y agoIt is how balance sheets work that have a "Crypto assets held" entry, if you then buy and sell said balance sheet entries the results show up in the income statement as profits and or losses.
- b112 4y agoThe context is that the Japanese regulator, FSA (Financial Services Agency) which regulates Banks, Cyrpto, and Brokerages is scary You're damn right they are, they demanded we fax them, and send our fiscals over on a floppy!
- rocqua 4y agoIt is just speculation that the threat of jail-time is pushing out coinbade right? It might just as well be that regulation (or other factors) are making operations unprofitable as far as I can tell.
- Danieru 4y agoCoinbase is unprofitable _everywhere_. The US market being their largest is thus their most unprofitable. You don't see them announcing a withdrawal from the American market. Only the FSA regulated market.
- carlosdp 4y ago> but also the risk that if they steal customer funds executives can go to jail What? This isn't a risk... just don't steal/commingle the funds. Plenty of banks have done that just fine! This whole post is nonsense. Coinbase reassuring assets aren't commingled explicitly in an announcement like this is in-line with their usual writing tone for public announcements. Their whole brand is "the regulation friendly crypto exchange." It seems to me that this is more just about the fact they've downsized a bunch with layoffs, and Coinbase Japan is just a casualty of that. Nothing more to it.
- forgetfreeman 4y agoWould you like to review the number of times exchanges previously hyped on HN have tripped over the incredibly low bar that is "just don't steal customer funds"?
- 4y ago
- merek 4y ago> The FSA regulated FTX Japan is the only regional FTX moving forward with returning depositor's assets Genuinely curious, do you have a source for this? Thanks
- Scoundreller 4y agohttps://www.bloomberg.com/news/articles/2022-11-14/ftx-japan-studying-whether-local-clients-can-get-crypto-back-after-bankruptcy https://www.bloomberg.com/news/articles/2022-11-14/ftx-japan... Which links to (hopefully this ascii-ized link works): https://help-jp.ftx.com/hc/ja/articles/12458835958681-%E5%BD%93%E7%A4%BE%E3%81%AB%E3%81%8A%E3%81%91%E3%82%8B%E3%81%8A%E5%AE%A2%E6%A7%98%E3%81%AE%E8%B3%87%E7%94%A3%E3%81%AE%E7%AE%A1%E7%90%86%E7%8A%B6%E6%B3%81%E7%AD%89%E3%81%AB%E3%81%A4%E3%81%84%E3%81%A6 https://help-jp.ftx.com/hc/ja/articles/12458835958681-%E5%BD...
- SilasX 4y agoThat’s a source that FTX Japan is returning assets, not that it’s the only regional one doing so. (LedgerX, an FTX holding, continued operations but I guess doesn’t count as a regional exchange?)
- fomine3 4y agoMore info here, my forgotten $200 will be returned in this Feb https://help-jp.ftx.com/hc/ja/articles/14609943182233-FTX-Japan%E5%8F%8A%E3%81%B3Liquid-Japan-%E3%81%8A%E5%AE%A2%E6%A7%98%E3%81%B8%E3%81%AE%E8%B3%87%E7%94%A3%E8%BF%94%E9%82%84%E3%81%AB%E9%96%A2%E3%81%99%E3%82%8B%E3%81%94%E6%A1%88%E5%86%85 https://help-jp.ftx.com/hc/ja/articles/14609943182233-FTX-Ja...
- janalsncm 4y agoThere is some logic to making the CEO a “legal synecdoche“ (catchy, I know!) for his/her company. No other person is better positioned to steer the company away from violating criminal laws, and CEOs tend to be paid handsomely for the trouble. Something like 400x what their average worker makes. Right now criminal penalties tend to just be the cost of doing business. Breaking the law isn’t scary, it’s a calculated risk. We have to think about whether this profit maximizing algorithm we are running as a society is good for us. Companies are basically paperclip maximizers, and at the expense of everything else. The only way things get solved isn’t by fighting tooth and nail for whack-a-mole laws which get watered down and repealed, it’s by changing the incentives. I’m not smart enough to know exactly what those incentives should be, but I am smart enough to know that “profit at all costs” is a pretty crappy one.
- pjc50 4y agoThe important thing about a "limited company" is precisely that the CEO and all of the other staff aren't legally equivalent to the company. That would be a partnership. This is a very useful technology in de-risking running a big business. There isn't a good reason for making the board liable for ordinary line of business failures. > Right now criminal penalties tend to just be the cost of doing business. Breaking the law isn’t scary, it’s a calculated risk. This, on the other hand, is a serious problem. It's why it's important for SBF and anybody who can be proved to have responsible knowledge of the fraud at FTX to go to jail for a long time. But in general power and money make you above the law, and voters are unwilling to take enough of an active informed involvement to fix this.
- sobkas 4y ago> The important thing about a "limited company" is precisely that the CEO and all of the other staff aren't legally equivalent to the company. That would be a partnership. This is a very useful technology in de-risking running a big business. There isn't a good reason for making the board liable for ordinary line of business failures. > > Right now criminal penalties tend to just be the cost of doing business. Breaking the law isn’t scary, it’s a calculated risk. > This, on the other hand, is a serious problem. It's why it's important for SBF and anybody who can be proved to have responsible knowledge of the fraud at FTX to go to jail for a long time. In case of corporations problem is how influential they are. How they are able to capture regulators, bribe politicians to deregulate and how their size will cause rest of economy to collapse if they get penalties they deserve. Only time I have seen any real action taken, was when rich investors got scammed. Especially if done by someone outside of elites. Stealing from lower/middle class OK, maybe you get small fine. Taking something from billionaire? You will be astonished how hard book can hit, when thrown with enough political/financial motivation. > But in general power and money make you above the law It's capitalism, people with capital make the rules. > and voters are unwilling to take enough of an active informed involvement to fix this. The problem is that to be informed in such cases it takes lots of time, money and effort. A second neverending second job and it only takes one mistake to get screwed. In most cases even government agencies that are supposed to oversee it, can't do so because corporations do a lot to obfuscate, hide and misdirect(also agencies funding gets cut so they can't go after expensive targets). How you are expecting individual to do something a dedicated/paid/staffed agency can't do. Especially when media corporations/politicians/NGO(another can of worms) actively lie on corporations behalf. Also are you expect regulators to retire with government pay? They see what is going inside of corporations and they want their share.