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The kind of protection people want: this exchange is not going to steal my funds The kind of "protection" regulators want: you can't buy or use crypto

pavlov 4y ago
The sad truth is that all the exchanges are going to steal your funds. Some of them just go about it in more sophisticated ways, like Coinbase paying out billions in stock-based compensation while losing money.
- cypress66 4y ago
  Thus the regulation so exchanges have to prove they have all the funds and aren't doing anything funny with it...
- piqi 4y ago
  > The sad truth is that all the exchanges are going to steal your funds. > like Coinbase paying out billions in stock-based compensation while losing money I really wish people put more effort into arguing their side in these discussions. Your point is absurd and lazy. [public company] pays some % of employee salary in stock >> while "losing money" >> ??? >> customer's property is stolen. > Did the SEC orchestrate FTX and all the other crypto failures FTX's problems were amplified by being unregulated, outside the US. The overwhelming majority were not US residents. The SEC didn't have jurisdiction over their International firm. The US version of FTX was handled very differently, but supposedly co-mingled funds. They FAILED to protect US residents by not shutting down the US version. They could have gave warnings about the international firm, instead of working so closely with FTX's founder. As usual, lots of hand-waving from crypto detractors. You have a clear bias. Sadly, when enough people share a bias, truth and facts are irrelevant. There's a lot to criticize about in crypto. No need to make up irrelevant associations.
  - pavlov 4y ago
    When Coinbase files for bankruptcy, crypto deposits will be at the back of the line. They are unsecured creditors. The company itself says that: https://www.bloomberg.com/news/articles/2022-05-11/coinbase-gives-256-billion-reminder-about-agonies-of-bankruptcy https://www.bloomberg.com/news/articles/2022-05-11/coinbase-... Coinbase executives will have enjoyed years of massive pay days selling stock pumped up with customer money. The customers who assumed the money in their accounts is protected like with a bank will be wiped out.
    - piqi 4y ago
      > When Coinbase files for bankruptcy, crypto deposits will be at the back of the line. They are unsecured creditors. I'm aware. This has nothing to do with your point about "stealing" deposits like other exchanges (e.g. FTX), and is irrelevant to stock-based compensation. It contributes nothing to the discussion. More noise to encourage others to feel safe that their bias is well liked. > Coinbase executives will have enjoyed years of massive pay days selling stock More irrelevant and false points. The company has only been public since April 2021. Not even two years. You are attempting to frame them as fat cat wall street types purposefully driving the company into the ground at customers' expense. Somehow you extrapolate this to "all exchanges" when Coinbase is the only publicly-traded exchange. remember that Coinbase was audited by the SEC before going public, and is one of the oldest exchanges. If any exchange is safe, it's Coinbase. The problem is the SEC doesn't give clear direction. Anybody that feels the SEC will "protect" them by forcing coinbase into bankruptcy is welcome to move their assets on-chain. Many people advocate for that. Again, I'm highlighting how lazy and absurd your argument is.
      - pavlov 4y ago
        It doesn’t seem like you know what your argument is. > “If any exchange is safe, it's Coinbase” Ok, so other exchanges are worse. > “Somehow you extrapolate this to ‘all exchanges’” You just told me the other exchanges are worse. > “You are attempting to frame them as fat cat wall street types purposefully driving the company into the ground at customers' expense” It doesn’t have to be purposeful. At the rate Coinbase is piling up losses, it will eventually be bankrupt, and executives will have accumulated billions while customers will lose billions. The SEC isn’t going to force a bankruptcy; Coinbase’s own poor management seems to be doing it. > “… is welcome to move their assets on-chain. Many people advocate for that.” Oh, I see you agree with me that nobody should use crypto exchanges in the first place. Because they will lose your money.
  - kingkawn 4y ago
    Those dang crypto detractors and their pesky, “this is a meaningless asset” talk
stanleydrew 4y ago
There are a number of obvious counterexamples to this, Coinbase's continued existence being just one.
- Osiris 4y ago
  They just got a Wells notice: https://www.reuters.com/legal/coinbase-issued-wells-notice-by-sec-2023-03-22/ https://www.reuters.com/legal/coinbase-issued-wells-notice-b...
  - greenyoda 4y ago
    HN disucssions of that: https://news.ycombinator.com/item?id=35267692 https://news.ycombinator.com/item?id=35267692 https://news.ycombinator.com/item?id=35267407 https://news.ycombinator.com/item?id=35267407
pessimizer 4y ago
The kind of protection people want: their in high-risk investments being protected as if they were in low-risk investments. They also want to eat cakes but still have those same cakes.
- dchftcs 4y ago
  I'm often on board with this sort of criticism of populist finance regulation but it is a bit nuanced. One problem retail voices tend to highlight is that institutions that take stupid risks can get bailed out for being too big to fail, while "the little guy" taking the same risks would have little help. They don't apply to all situations, and your criticism is somewhat valid for many crypto cases, but between crypto and traditional finance it's true that regulators can be too heavy-handed on some areas in crypto while being a lot more lenient on say people who run a company to ground in a leveraged buyout.
alphanullmeric 4y ago
Yep. You can tell what someone really means by protection when you ask them whether or not it should be opt in. Other forms of supposed investor protection include various violations of privacy in the name of transparency, such as banning privacy coins and mandated transaction tracking.
agentgumshoe 4y ago
If people just wanted crypto for its utility they wouldn't give their money to exchanges in the first place. But they take that risk for sparkly returns. Too many people want to have their cake and eat it too: - Crypto separate from banking system but still regulated in the same way anyway - Crypto as currency but still want juicy returns - Crypto is decentralised but give their coins to centralised exchanges

pavlov 4y ago

The sad truth is that all the exchanges are going to steal your funds. Some of them just go about it in more sophisticated ways, like Coinbase paying out billions in stock-based compensation while losing money.

cypress66 4y ago
Thus the regulation so exchanges have to prove they have all the funds and aren't doing anything funny with it...
piqi 4y ago
> The sad truth is that all the exchanges are going to steal your funds. > like Coinbase paying out billions in stock-based compensation while losing money I really wish people put more effort into arguing their side in these discussions. Your point is absurd and lazy. [public company] pays some % of employee salary in stock >> while "losing money" >> ??? >> customer's property is stolen. > Did the SEC orchestrate FTX and all the other crypto failures FTX's problems were amplified by being unregulated, outside the US. The overwhelming majority were not US residents. The SEC didn't have jurisdiction over their International firm. The US version of FTX was handled very differently, but supposedly co-mingled funds. They FAILED to protect US residents by not shutting down the US version. They could have gave warnings about the international firm, instead of working so closely with FTX's founder. As usual, lots of hand-waving from crypto detractors. You have a clear bias. Sadly, when enough people share a bias, truth and facts are irrelevant. There's a lot to criticize about in crypto. No need to make up irrelevant associations.
- pavlov 4y ago
  When Coinbase files for bankruptcy, crypto deposits will be at the back of the line. They are unsecured creditors. The company itself says that: https://www.bloomberg.com/news/articles/2022-05-11/coinbase-gives-256-billion-reminder-about-agonies-of-bankruptcy https://www.bloomberg.com/news/articles/2022-05-11/coinbase-... Coinbase executives will have enjoyed years of massive pay days selling stock pumped up with customer money. The customers who assumed the money in their accounts is protected like with a bank will be wiped out.
  - piqi 4y ago
    > When Coinbase files for bankruptcy, crypto deposits will be at the back of the line. They are unsecured creditors. I'm aware. This has nothing to do with your point about "stealing" deposits like other exchanges (e.g. FTX), and is irrelevant to stock-based compensation. It contributes nothing to the discussion. More noise to encourage others to feel safe that their bias is well liked. > Coinbase executives will have enjoyed years of massive pay days selling stock More irrelevant and false points. The company has only been public since April 2021. Not even two years. You are attempting to frame them as fat cat wall street types purposefully driving the company into the ground at customers' expense. Somehow you extrapolate this to "all exchanges" when Coinbase is the only publicly-traded exchange. remember that Coinbase was audited by the SEC before going public, and is one of the oldest exchanges. If any exchange is safe, it's Coinbase. The problem is the SEC doesn't give clear direction. Anybody that feels the SEC will "protect" them by forcing coinbase into bankruptcy is welcome to move their assets on-chain. Many people advocate for that. Again, I'm highlighting how lazy and absurd your argument is.
    - pavlov 4y ago
      It doesn’t seem like you know what your argument is. > “If any exchange is safe, it's Coinbase” Ok, so other exchanges are worse. > “Somehow you extrapolate this to ‘all exchanges’” You just told me the other exchanges are worse. > “You are attempting to frame them as fat cat wall street types purposefully driving the company into the ground at customers' expense” It doesn’t have to be purposeful. At the rate Coinbase is piling up losses, it will eventually be bankrupt, and executives will have accumulated billions while customers will lose billions. The SEC isn’t going to force a bankruptcy; Coinbase’s own poor management seems to be doing it. > “… is welcome to move their assets on-chain. Many people advocate for that.” Oh, I see you agree with me that nobody should use crypto exchanges in the first place. Because they will lose your money.
- kingkawn 4y ago
  Those dang crypto detractors and their pesky, “this is a meaningless asset” talk

stanleydrew 4y ago

There are a number of obvious counterexamples to this, Coinbase's continued existence being just one.

Osiris 4y ago
They just got a Wells notice: https://www.reuters.com/legal/coinbase-issued-wells-notice-by-sec-2023-03-22/ https://www.reuters.com/legal/coinbase-issued-wells-notice-b...
- greenyoda 4y ago
  HN disucssions of that: https://news.ycombinator.com/item?id=35267692 https://news.ycombinator.com/item?id=35267692 https://news.ycombinator.com/item?id=35267407 https://news.ycombinator.com/item?id=35267407

pessimizer 4y ago

The kind of protection people want: their in high-risk investments being protected as if they were in low-risk investments. They also want to eat cakes but still have those same cakes.

dchftcs 4y ago
I'm often on board with this sort of criticism of populist finance regulation but it is a bit nuanced. One problem retail voices tend to highlight is that institutions that take stupid risks can get bailed out for being too big to fail, while "the little guy" taking the same risks would have little help. They don't apply to all situations, and your criticism is somewhat valid for many crypto cases, but between crypto and traditional finance it's true that regulators can be too heavy-handed on some areas in crypto while being a lot more lenient on say people who run a company to ground in a leveraged buyout.

alphanullmeric 4y ago

Yep. You can tell what someone really means by protection when you ask them whether or not it should be opt in. Other forms of supposed investor protection include various violations of privacy in the name of transparency, such as banning privacy coins and mandated transaction tracking.

agentgumshoe 4y ago

If people just wanted crypto for its utility they wouldn't give their money to exchanges in the first place. But they take that risk for sparkly returns. Too many people want to have their cake and eat it too: - Crypto separate from banking system but still regulated in the same way anyway - Crypto as currency but still want juicy returns - Crypto is decentralised but give their coins to centralised exchanges