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$63.2 billion of which: - 30% is hold in USDT (for which there is 0 proof that it is 1-1 backed) - 10% is hold in its own stablecoin BUSD (Not always 1-1 back

by janmo 4y ago

$63.2 billion of which: - 30% is hold in USDT (for which there is 0 proof that it is 1-1 backed) - 10% is hold in its own stablecoin BUSD (Not always 1-1 backed source) - 5% is in its own native token BNB - 15% is in small cap (shtcoins) source*: https://protos.com/binances-stablecoin-busd-hasnt-always-been-11-backed-report/ https://protos.com/binances-stablecoin-busd-hasnt-always-bee...

SV_BubbleTime 4y ago
So, how do you bet against them now?
- latchkey 4y ago
  Short BNB
  - codetrotter 4y ago
    But there is no way to know the timeframe. That is one of the things I don’t understand about shorting.
    - jacquesm 4y ago
      Shorting is gambling if it isn't informed by knowledge that is legally obtained but not common. And even then: the kind of leverage that you are playing with has limited upside and unlimited downside so it isn't for everybody. Trading in stocks at least has a limit on the downside (but lacks the degree of leverage that you can get with shorting). The main risk that you've correctly identified is that even the best information will come with caveats around the timeframe, the next being that you can't assume you are dealing with rational actors. That's why you see parties that short based on relatively unknown information publish that information as loud as they can after they've made their trades so that they can control the timing to some extent.
      - kortilla 4y ago
        >Trading in stocks at least has a limit on the downside (but lacks the degree of leverage that you can get with shorting). Shorting downside can be capped and leverage gained by purchasing puts. Trading stocks long absolutely has leverage from margin and even much further leverage available through the purchase of calls.
      - latchkey 4y ago
        > That's why you see parties that short based on relatively unknown information publish that information as loud as they can after they've made their trades so that they can control the timing to some extent. Case in point... https://news.ycombinator.com/item?id=35278316 https://news.ycombinator.com/item?id=35278316
    - Gasp0de 4y ago
      You can just keep shorting it (depending on the timeframe). Just pay whoever gave you the shares a monthly "rent". You are just betting that you will be making a profit that is larger. So if it takes 3 months to go down, you need to be sure that the shares will drop more than the rent you pay in these 3 months.
      - latchkey 4y ago
        https://perp.planet.finance/en/futures/BNBUSDT https://perp.planet.finance/en/futures/BNBUSDT
- bboygravity 4y ago
  Buy BTC. My reasoning being: people will pull out the little money that's still left in the Binance ponzi and will (possibly) convert to or withraw in actual real BTC in their own wallets. It might cause a ripple effect where other people do the same in other exchanges out of fear. One day people on the "normal" stock market will also wake up to similar things happening there and will start moving shares from ponzi brokers to the direct registration system.
  - pharmakom 4y ago
    I think BTC comes out better than the other coins buts it's way down too.
    - bboygravity 4y ago
      Check the chart again since I wrote that comment ;)
  - jjeaff 4y ago
    No, get out of crypto. Another big player going down is just yet another bullet hole in crypto's reputation.
    - bboygravity 4y ago
      Binance is not a crypto player. It's a ponzi player. Not the same thing. If Binance wasn't "fractional reserve crypto broker" (aka: ponzi) we wouldn't be having this discussion.
      - NotYourLawyer 4y ago
        It’s literally exactly the same thing.
        bboygravity 4y ago
        No it's not. In one case you buy a Bitcoin and you get to own a Bitcoin. In the other case (Binance) you buy a Bitcoin and don't get to own a Bitcoin (or in the very best case: you might or might not get to own that Bitcoin you bought). Not the same.
fastball 4y ago
But does it matter if Tether is 1-1 backed (or any of your other points) if what the customers deposited is those things? As in, Binance hasn't failed if USDT goes to zero but you're still able to withdraw that Tether you have in Binance.
- batiudrami 4y ago
  Depends if they used any of that money to make any other crypto bets to improve profitability. That’s what gets you.
tamrix 4y ago
The USD has never been 1-1 backed. Still seems to work just fine.
- jacquesm 4y ago
  That's because a very large number of people believe in the government they elected and an even larger number of people believe in the US economy and its international trades. If not for that the US dollar would evaporate but as long as all of these people believe in it and use it as the reserve currency for the world the US dollar has nothing to fear. It may fluctuate but you can't do a 'bank run' on the USD. You can do all of the usual forex tricks (including shorting the USD) depending on how much your own belief is at odds with a counterparty that holds a (slightly) different belief. George Soros famously made a fortune (a cool billion, which was a lot of money in the day) doing just that with the British Pound. Individual banks may go under, but they all use the same underlying currencies. Binance has a similar problem (but different in many important respects). The number of people that 'believe' in Binance is a lot smaller and if enough of those people want their money (for instance USD!) back then Binance had better cough them up or they'll go bust. If you don't have a deposit there you are likely either a neutral party or you are already liquid (in that case: good only). If you do have a deposit there and you're willing to let them hold on to it then you are betting that they will stay in business. I don't know about your financial situation but if you can't afford to lose your money then you may want to update your status bits on this news, a $2B outflow in a short period of time is not something a company like Binance can sustain indefinitely, where 'indefinitely' is something like '30 days'. It will be interesting to watch this play out and to see if they manage to hold the fort. Personally I would be highly surprised if they can sustain a drawn out run. But if they somehow can they'll be attracting a lot of business.
- CSMastermind 4y ago
  The US dollar is backed by the monopoly of force the United States government maintains primarily within its own borders and without as well. The government requires you pay taxes in USD and will lock you in a cage by force if you do not. It requires that you accept USD as valid for commerce and again will lock you in a cage by force if you do not. If you attempt to counterfeit the currency, again locked in a cage by force. The USD is as strong as the government's monopoly on force. Crypto currency is backed by either nothing ("people faith" waves hands in a rainbow gesture) or some dude named Dan in Ohio or whatever.
lawn 4y ago
> 30% is hold in USDT (for which there is 0 proof that it is 1-1 backed) They've even admitted that it's not 1-1 backed by fiat themselves, so pretty safe assumption to make.
evdubs 4y ago
Tether's attestation reports are a form of proof that show they indeed are 1-1 backed by the value of outstanding USDt tokens at par. [1]. Paxos publishes the same for BUSD on ETH. [2] Paxos has redeemed $10B of BUSD (> 50%) in an orderly fashion over the past couple months as they wind their product down. [1] https://tether.to/en/transparency/#reports https://tether.to/en/transparency/#reports [2] https://paxos.com/busd-transparency/ https://paxos.com/busd-transparency/
- automatic6131 4y ago
  Tether's attestation reports are not worthy to be my toilet paper. BUSD on BSC has been demonstrated to not at all be backed by enough BUSD on Eth as managed by Paxos (which does seem to be backed)
  - DalasNoin 4y ago
    While I don't like tether and am aware of some of its shady practices, people who bet against it have lost a lot of Bayes points at this moment in time.
    - automatic6131 4y ago
      Not an argument - here are some of the boring, platidinous responses: The market can remain irrational longer than you can remain solvent; how long did Madoff's ponzi last again?; why would anyone bet against the casino owner in a casino of their making; something something counterparty risk. The Tether fraud has only really been rip roaring for about 4 years. We're still so early :^).
- NotYourLawyer 4y ago
  Attestation reports are not audited financial statements.
  - evdubs 4y ago
    And? Having an income statement or a cash flow statement is not what Tether critics claim to want. The attestation report is basically a balance sheet for Tether showing their assets (cash, cash equivalents, etc.) and liabilities (outstanding USDt tokens). BDO Italia confirms Tether's assets by going directly to Tether's banking partners to get their info. The reports are point-in-time, but there have been several of them by now and each one has shown Tether to be backed. Same for Paxos.
BillyTheKing 4y ago
If binance users themselves hold 30% USDT on average it doesn't matter for Binance whether it's pegged or not (I mean, obviously it will still matter somewhat), since any de-peg event will also devalue any USDT user-balances

by janmo 4y ago

SV_BubbleTime 4y ago

So, how do you bet against them now?

latchkey 4y ago
Short BNB
- codetrotter 4y ago
  But there is no way to know the timeframe. That is one of the things I don’t understand about shorting.
  - jacquesm 4y ago
    Shorting is gambling if it isn't informed by knowledge that is legally obtained but not common. And even then: the kind of leverage that you are playing with has limited upside and unlimited downside so it isn't for everybody. Trading in stocks at least has a limit on the downside (but lacks the degree of leverage that you can get with shorting). The main risk that you've correctly identified is that even the best information will come with caveats around the timeframe, the next being that you can't assume you are dealing with rational actors. That's why you see parties that short based on relatively unknown information publish that information as loud as they can after they've made their trades so that they can control the timing to some extent.
    - kortilla 4y ago
      >Trading in stocks at least has a limit on the downside (but lacks the degree of leverage that you can get with shorting). Shorting downside can be capped and leverage gained by purchasing puts. Trading stocks long absolutely has leverage from margin and even much further leverage available through the purchase of calls.
    - latchkey 4y ago
      > That's why you see parties that short based on relatively unknown information publish that information as loud as they can after they've made their trades so that they can control the timing to some extent. Case in point... https://news.ycombinator.com/item?id=35278316 https://news.ycombinator.com/item?id=35278316
  - Gasp0de 4y ago
    You can just keep shorting it (depending on the timeframe). Just pay whoever gave you the shares a monthly "rent". You are just betting that you will be making a profit that is larger. So if it takes 3 months to go down, you need to be sure that the shares will drop more than the rent you pay in these 3 months.
    - latchkey 4y ago
      https://perp.planet.finance/en/futures/BNBUSDT https://perp.planet.finance/en/futures/BNBUSDT
bboygravity 4y ago
Buy BTC. My reasoning being: people will pull out the little money that's still left in the Binance ponzi and will (possibly) convert to or withraw in actual real BTC in their own wallets. It might cause a ripple effect where other people do the same in other exchanges out of fear. One day people on the "normal" stock market will also wake up to similar things happening there and will start moving shares from ponzi brokers to the direct registration system.
- pharmakom 4y ago
  I think BTC comes out better than the other coins buts it's way down too.
  - bboygravity 4y ago
    Check the chart again since I wrote that comment ;)
- jjeaff 4y ago
  No, get out of crypto. Another big player going down is just yet another bullet hole in crypto's reputation.
  - bboygravity 4y ago
    Binance is not a crypto player. It's a ponzi player. Not the same thing. If Binance wasn't "fractional reserve crypto broker" (aka: ponzi) we wouldn't be having this discussion.
    - NotYourLawyer 4y ago
      It’s literally exactly the same thing.
      - bboygravity 4y ago
        No it's not. In one case you buy a Bitcoin and you get to own a Bitcoin. In the other case (Binance) you buy a Bitcoin and don't get to own a Bitcoin (or in the very best case: you might or might not get to own that Bitcoin you bought). Not the same.

fastball 4y ago

But does it matter if Tether is 1-1 backed (or any of your other points) if what the customers deposited is those things? As in, Binance hasn't failed if USDT goes to zero but you're still able to withdraw that Tether you have in Binance.

batiudrami 4y ago
Depends if they used any of that money to make any other crypto bets to improve profitability. That’s what gets you.

tamrix 4y ago

The USD has never been 1-1 backed. Still seems to work just fine.

jacquesm 4y ago
That's because a very large number of people believe in the government they elected and an even larger number of people believe in the US economy and its international trades. If not for that the US dollar would evaporate but as long as all of these people believe in it and use it as the reserve currency for the world the US dollar has nothing to fear. It may fluctuate but you can't do a 'bank run' on the USD. You can do all of the usual forex tricks (including shorting the USD) depending on how much your own belief is at odds with a counterparty that holds a (slightly) different belief. George Soros famously made a fortune (a cool billion, which was a lot of money in the day) doing just that with the British Pound. Individual banks may go under, but they all use the same underlying currencies. Binance has a similar problem (but different in many important respects). The number of people that 'believe' in Binance is a lot smaller and if enough of those people want their money (for instance USD!) back then Binance had better cough them up or they'll go bust. If you don't have a deposit there you are likely either a neutral party or you are already liquid (in that case: good only). If you do have a deposit there and you're willing to let them hold on to it then you are betting that they will stay in business. I don't know about your financial situation but if you can't afford to lose your money then you may want to update your status bits on this news, a $2B outflow in a short period of time is not something a company like Binance can sustain indefinitely, where 'indefinitely' is something like '30 days'. It will be interesting to watch this play out and to see if they manage to hold the fort. Personally I would be highly surprised if they can sustain a drawn out run. But if they somehow can they'll be attracting a lot of business.
CSMastermind 4y ago
The US dollar is backed by the monopoly of force the United States government maintains primarily within its own borders and without as well. The government requires you pay taxes in USD and will lock you in a cage by force if you do not. It requires that you accept USD as valid for commerce and again will lock you in a cage by force if you do not. If you attempt to counterfeit the currency, again locked in a cage by force. The USD is as strong as the government's monopoly on force. Crypto currency is backed by either nothing ("people faith" waves hands in a rainbow gesture) or some dude named Dan in Ohio or whatever.

lawn 4y ago

> 30% is hold in USDT (for which there is 0 proof that it is 1-1 backed) They've even admitted that it's not 1-1 backed by fiat themselves, so pretty safe assumption to make.

evdubs 4y ago

Tether's attestation reports are a form of proof that show they indeed are 1-1 backed by the value of outstanding USDt tokens at par. [1]. Paxos publishes the same for BUSD on ETH. [2] Paxos has redeemed $10B of BUSD (> 50%) in an orderly fashion over the past couple months as they wind their product down. [1] https://tether.to/en/transparency/#reports https://tether.to/en/transparency/#reports [2] https://paxos.com/busd-transparency/ https://paxos.com/busd-transparency/

automatic6131 4y ago
Tether's attestation reports are not worthy to be my toilet paper. BUSD on BSC has been demonstrated to not at all be backed by enough BUSD on Eth as managed by Paxos (which does seem to be backed)
- DalasNoin 4y ago
  While I don't like tether and am aware of some of its shady practices, people who bet against it have lost a lot of Bayes points at this moment in time.
  - automatic6131 4y ago
    Not an argument - here are some of the boring, platidinous responses: The market can remain irrational longer than you can remain solvent; how long did Madoff's ponzi last again?; why would anyone bet against the casino owner in a casino of their making; something something counterparty risk. The Tether fraud has only really been rip roaring for about 4 years. We're still so early :^).
NotYourLawyer 4y ago
Attestation reports are not audited financial statements.
- evdubs 4y ago
  And? Having an income statement or a cash flow statement is not what Tether critics claim to want. The attestation report is basically a balance sheet for Tether showing their assets (cash, cash equivalents, etc.) and liabilities (outstanding USDt tokens). BDO Italia confirms Tether's assets by going directly to Tether's banking partners to get their info. The reports are point-in-time, but there have been several of them by now and each one has shown Tether to be backed. Same for Paxos.

BillyTheKing 4y ago

If binance users themselves hold 30% USDT on average it doesn't matter for Binance whether it's pegged or not (I mean, obviously it will still matter somewhat), since any de-peg event will also devalue any USDT user-balances