Binance freezes withdrawals of stablecoin USDC as investors pull $2B(markets.businessinsider.com)

441 pointsby manholio4 yıl önce297 comments

markets.businessinsider.com

Binance freezes withdrawals of stablecoin USDC as investors pull $2B

https://markets.businessinsider.com/news/currencies/crypto-binance-freeze-usdc-withdrawals-changpeng-zhao-cz-ftx-collapse-2022-12

308 comments

crypt1d4 yıl önce

USDC withdrawals have been enabled again, but I don't suppose that's HN front-page worthy as much as the panic inducing titles.

https://twitter.com/binance/status/1602708590271385600?s=20&...

9935c101ab17a664 yıl önce

? Withdrawals working isn’t newsworthy — that should always be the case. But when a “financial institution” in a notoriously unstable market segment prevents users from withdrawing their own funds, then of course its going to be a big story (as it should be!).

q1w24 yıl önce

Withdrawals RESUMING after stopping is just as newsworthy.

plugger4 yıl önce

Yes, suprisingly people seem to react negatively to being frozen out of withdrawing their cash and those events are newsworthy?

crypt1d4 yıl önce

Its a pretty big leap from "you cannot withdraw this particular stablecoin at the moment, use another one" to "you cannot withdraw your cash". Devil is in the details.

plugger4 yıl önce

Isn't the stablecoin considered a financial instrument? The devil may be in the details, but the high level facts remain. People could not access financial instruments that they own, and that could be considered newsworthy.

dorkwood4 yıl önce

What about all the planes that made it to their destination? Why doesn't the news report that?

latchkey4 yıl önce

I'm not defending Binance in any way, but this is FUD that is getting blown out of the water (arguably, people are on edge these days). It was pre-announced downtime for a hardfork on their BSC chain.

https://twitter.com/cz_binance/status/1602510004795367424

It has caused a bit of a bank run and cz says things are processing just fine (along with tons of 3rd party confirmations).

https://twitter.com/cz_binance/status/1602676998094069760

I know HN wants to see crypto die in a giant ball of flaming fire, but let's not lower ourselves to the point of just passing on FUD.

Edit: -4 incoming. I'm going to leave this here because it is worth it. I'm not a fan of FUD and neither should you be.

jjulius4 yıl önce

>I'm not defending Binance in any way, but this is FUD that is getting blown out of the water (arguably, people are on edge these days). It was pre-announced downtime for a hardfork on their BSC chain.

>https://twitter.com/cz_binance/status/1602510004795367424

>It has caused a bit of a bank run and cz says things are processing just fine (along with tons of 3rd party confirmations).

>https://twitter.com/cz_binance/status/1602676998094069760

>I know HN wants to see crypto die in a giant ball of flaming fire, but let's not lower ourselves to the point of just passing on FUD.

>Edit: -4 incoming. I'm going to leave this here because it is worth it. I'm not a fan of FUD and neither should you be.

I'm going to quote this full comment for posterity's sake, but I also think that you're a bit confused. You say that "it was pre-announced downtime" and cite a tweet from yesterday that says "Also done now. All resumed". In point of fact, withdrawals are not resumed, and a tweet from CZ today confirms that withdrawals are down and they're waiting for a US bank to open[1].

Edit: Shit, Binance themselves even admit this is because of a token swap, not planned downtime[2]. How is this FUD?

Edit 2: Withdrawals back online as of ~5 minutes prior to my comment[3].

[1]https://twitter.com/cz_binance/status/1602579499903852544

[2]https://twitter.com/binance/status/1602579775721283584

[3]https://twitter.com/binance/status/1602708590271385600

ChainOfFools4 yıl önce

> In point of fact, withdrawals are not resumed, and a tweet from CZ today confirms that withdrawals are down and they're waiting for a US bank to open

Thus the proper expansion of the initialism FUD is, (directed at grandparent,) "Facts U Dislike"

latchkey4 yıl önce

Weird flex, I'm fine with my comment and promise that I won't edit it any further.

Yes, the downtime was yesterday, scroll up on the thread that I quoted. The FUD started with this tweet:

https://twitter.com/Travis_Kling/status/1602400700192985100

The point being that this is FUD, and HN is pushing something full of it. Which is gross and low bar.

If Binance does go belly up, it won't be because of USDC withdrawals being paused. It will be a lot deeper than that and will likely cover USDT, since the majority of their customers are outside of the US (or at least should be, legally) and because, well, USDT.

Hours after that tweet you quoted (which was at 12am), things are processing as normal.

jjulius4 yıl önce

>The point being that this is FUD, and HN is pushing something full of it. Which is gross and low bar.

With all due respect, the FUD in this thread is coming from you. Taking a look at Binance's announcement about the downtime[1], it mentions withdrawals and deposits both being frozen yesterday morning for a "network upgrade and hard fork", and that ended at about 11PM Eastern[4] yesterday. The withdrawal freeze that this HN thread is about only happened ~3:30AM Eastern today[2] because "[they] have seen an increase of withdrawals" and they needed to perform a swap through a US bank, and deposits remained available (a key difference between the two freezes).

These were two separate freezes that you are conflating into one.

>Hours after that tweet you quoted (which was at 12am), things are processing as normal.

They only started processing as normal at ~11:54AM Eastern, just now[3].

[1]https://www.binance.com/en/support/announcement/binance-will...

[2]https://twitter.com/binance/status/1602579775721283584

[3]https://twitter.com/binance/status/1602708590271385600

[4]https://twitter.com/cz_binance/status/1602510004795367424

latchkey4 yıl önce

(2)

adrr4 yıl önce

Do we know what token they swapped USDC for? Why would you swap a stable coin for another token? Didn't FTX swap coins for their native currency and use the proceeds for Alameda?

flamemyst4 yıl önce

All deposit of USDC automatically converted to BUSD.

Actually it makes thing easier for user because now USDC and BUSD always calculated as 1:1 with no swap fee. Crypto pair are more lean since they only need to pair with BUSD.

Options to withdraw USDC still available and will use BUSD balance.

latchkey4 yıl önce

Don't forget that Binance has zero trading fees for BUSD pairs.

They've been extending this promotion for a while now...

https://www.binance.com/en/support/announcement/binance-exte...

jqpabc1234 yıl önce

I know HN wants to see crypto die in a giant ball of flaming fire,

Or maybe crypto has always been a "giant ball of flaming fire" and HN is just trying to discourage people from throwing real money into it.

latchkey4 yıl önce

(2)

dogman1444 yıl önce

I am… fairly well versed in this area. This is a nonsense take because:

- USDC is on eth, BSC chain halts impact USDC is like saying apple halted because android updated. Did not see anything to indicate it was USDC on BSC, but if so that changes things. If they did USDC -> BUSD, still should have 0 impact on w/ds off-platform.

- managing liquidity reqs via silvergate or w/e the USDC w/d bank is called is managed just fine without USDC down time by plenty of other parties conducting USDC treasury operations.

At best, this indicates binance has really bad treasury management and is cause for concern. At worse, smoke -> fire. Anything to do with internal treasury ops (fair enough, do a pause) does not have cascading effects on user w/ds

jankyxenon4 yıl önce

The opposite of fear, uncertainty and doubt would be something like optimism, certitude and faith.

I'd rather apply a lens of FUD to hard problems than the latter.

Sebguer4 yıl önce

"A bit of a bank run" is like saying "a small nuclear bomb".

treis4 yıl önce

This is a terrible low effort post. Anyone holding a large amount of crypto should have the majority of it in a cold wallet. It should take a significant amount of time to make that transfer because it should involve significant controls like multiple people travelling to a secure site.

An honest crypto exchange might see a "bit of a bank run" without raising any significant alarm.

eschulz4 yıl önce

You can't get a little bit pregnant

latchkey4 yıl önce

Last time I checked, I can't get pregnant, at all.

salawat4 yıl önce

Interesting that a bank run, (non-banks restoring theor fiscal custody of their own money, leaving the banking empty) is considered analogous to a weapon of mass destruction.

What's so taboo about everyone having their own money in hand?

freejazz4 yıl önce

I will never trust anyone that uses the word "FUD"

latchkey4 yıl önce

(1)

neilv4 yıl önce

Whenever there are runs on businesses in the "crypto" scam space, I wonder whether the withdrawals/cashouts that did/do get through are connected to whomever runs that business, before slamming the door on unconnected people.

spookthesunset4 yıl önce

Of course that is what happened. It’s crypto. It’s scams and exit scams all the way down. Always was always will be.

[deleted]4 yıl önce

Octokiddie4 yıl önce

> The world's biggest crypto exchange will freeze all withdrawals of USD Coin while it conducts a "token swap" to boost its holdings of the dollar-pegged cryptocurrency, the crypto group's CEO Changpeng Zhao said Tuesday

It's worth noting that USDC is not even a token controlled by Binance. It's controlled and issued by Circle. So effectively, Binance is refusing to honor its commitment to depositors to give them their money on demand.

That's called a "default."

Why? The article says something about a key bank being closed. Nonsense. Is the USDC held at that bank? No. Binance is allegedly holding it. Only clearly they're not because they can't produce it on demand.

I'm frankly amazed that people with the ability to understand this alphabet soup mumbo jumbo keep falling for the same scam over and over again. Underneath all of the slick marketing and nerd posturing is a simple truth: these are all fractional reserve systems. Conceptually, they are no different than banks or pyramid schemes.

The only possible reason you want a stable coin, rather than dollars, in the first place is because you're doing something that requires you to route around US financial regulation.

The US dollar is digital. It moves around the world using a digital network. It's traded the world over by almost every country whether they want to or not. You can buy almost anything there is to buy with US dollars.

You "need" a stable coin because you're trying to have your cake and eat it too: US dollar-like liquidity and value preservation without US dollar financial regulation.

wpietri4 yıl önce

> US dollar-like liquidity and value preservation without US dollar financial regulation.

Or in other words, they'd like the benefits of regulation without the costs of regulation. Which I certainly appreciate. As a child my plan for adulthood was desserts all the time, no vegetables ever.

jacobsimon4 yıl önce

Stablecoins have totally valid use cases in the crypto ecosystem that don’t involve skirting regulations. People want something that isn’t volatile. It takes days to deposit and withdraw actual USD from exchanges and requires centralized entities that charge fees (or are totally untrustworthy as we’ve seen). Contracts and dapps can hold and interact with USDC to create useful applications that aren’t just speculative investing.

hef198984 yıl önce

Morgan Stanley ised to take a couple of days as well to wire Euros to my bank account. Never ever was that an issue, or something I wanted to solve by using an almast-but-not-really Euro, or Dollar.

jacquesm4 yıl önce

And that's entirely on them, international bank transfers within the EU take mere moments now.

rufusroflpunch4 yıl önce

It’s not really any less of a dollar than any other dollar is. All of our digital dollars are just bank liabilities. Circle and Tether are just banks with dollar liabilities. Their liabilities can be transferred on crypto networks rather than traditional bank wires.

rglullis4 yıl önce

> Circle and Tether are just banks with dollar liabilities.

But no regulatory oversight, and no chance for the common folk to prosecute or get their money back if they default.

I am one of the resident crypto apologists here on HN, but there is no way that we should even try to accept what the big exchanges are doing. The whole point of crypto is to have systems that do not depend on "too big to fail" institutions, why are we suddenly trying to find excuses for their BS?

matthewdgreen4 yıl önce

Tether has no meaningful regulatory oversight. Circle has money transmitter licenses in most US states, some of which cover them as a virtual asset service provider, and require specific conditions around the way that they store customer funds: https://www.circle.com/en/legal/usdc-terms

I'm not claiming this is perfect, but it's pretty different.

smoldesu4 yıl önce

That's great, but that only eliminates 2-3 classes of fraud from their potential thousands of exploits. We put too much trust in centralized companies to manage decentralized communities, and I'd bet you dollars-to-donuts that Circle will end up complicit in some sort of scheme.

jacobsimon4 yıl önce

Not trying to make excuses for any of these companies. I'm just saying, in the abstract, there are lots of reasons why an end user would want a stablecoin besides "avoiding regulations". Even if it weren't pegged to a national currency, there is value in having a digital currency that limits its volatility. Pegging to another currency is a shortcut for doing that w/o needing decentralized monetary policy.

coliveira4 yıl önce

Basically these people are trying to get the benefit of digital currencies without the downside of volatility. Somebody else will have to take the volatility risk. This is easy to do when the crypto currencies are going up in value, and almost impossible to do on the downside.

zeven74 yıl önce

> almost impossible to do on the downside

And yet most stable coins have maintained their peg for years now, despite many of them having gone through 2 large bear markets. If 80%-90% down and still pegged doesn't disprove "impossible to do on the downside" I don't know what could.

Clarification: I do think Tether is not fully backed and is likely to depeg some day, but the assertion that it's "impossible to do on the downside" is clearly not true even for Tether. And it's very clearly not impossible to keep a peg if the peg is fully backed, which may be the case for some coins (without naming specifics). DAI, backed by verifiable collateral, has also done extremely well through 2 bear markets.

Animats4 yıl önce

> I do think Tether is not fully backed and is likely to depeg some day.

Which is a good reason to get out. Stablecoins have only two stable points, 1 and 0. When they crash, they go all the way. Look at what happened with the stablecoins that already crashed.

landemva4 yıl önce

1 or 0 is true of government currencies. The unknown is when. For the Bretton Woods USD 'when' was August 15 1971.

https://history.state.gov/milestones/1969-1976/nixon-shock

jacobsimon4 yıl önce

Maybe but not necessarily. I can log in to Coinbase and buy USDC with dollars in my bank account, use the USDC in a variety of decentralized applications or contracts, and then exchange my USDC for USD again via Coinbase. It’s similar to going to the bank and withdrawing cash, and it has no inherent volatility or downside risk.

rufusroflpunch4 yıl önce

Sorry, I did not mean to insinuate anything resembling cover for these stablecoins. I do not own any and I never would. In fact, I only own Bitcoin and I don’t keep any on any exchange at all. This is the only way I would ever recommend when interacting with cryptocurrencies.

thatguy09004 yıl önce

It is less of a dollar, because I can say you can exchange it for a dollar when you can not, in fact, exchange it for a dollar when you try to,because I never had enough(or any) dollars. In the real world when the bank runs out of dollars the government will give me dollars instead.

aeternum4 yıl önce

For US citizens perhaps, but if you're a Russian citizen or company, the USD in your bank account is now just a worthless database entry.

Just because that weapon hasn't been pointed at some group of US citizens yet doesn't mean it can't in the future.

hef198984 yıl önce

Maybe, maybe not. In the meanwhile SBF and similar figures are happy to protect your money in crypto assets.

aeternum4 yıl önce

Not your keys, not your coins. Those not willing to learn self-custody are definitely better off in USD.

jacquesm4 yıl önce

> In the real world when the bank runs out of dollars the government will give me dollars instead.

Up to a point.

rufusroflpunch4 yıl önce

I think that is a fair critique, but that will be coming at some point, very likely. Either a law requiring 100% liquid reserves, or a law bringing them into the FDIC system.

graeme4 yıl önce

Not volatile? The point of stablecoins is they’re supposed to match the USD in value. By definition they are more volatile than usd as they are pegged to it and vary in price

KMag4 yıl önce

> By definition they are more volatile than usd as they are pegged to it and vary in price

I understand your reasoning, and you're correct in this case (assuming your numeraire is USD). However, if your numeraire is something like a GDP-weighted basket of USD, EUR, JPY, and CNH, it's possible for a USD-pegged asset to be less volatile than USD (since your unit of account isn't USD).

KMag4 yıl önce

Note that if the above is the case, that would imply that the tracking error of your USD-pegged asset is correlated to the non-USD components of your numeraire. In a risk-off/flight-to-quality environment (depending on the exact circumstances, but in general) you'd expect EUR and CNH to drop in relation to the USD and often JPY to rise in relation to USD. The opposite would be expected in a risk-on scenario.

Presumably, your USD-pegged asset would drop in relation to the USD in a risk-off scenario and rise in a risk-on scenario, so in that case it would seem that your tracking error would tend to be correlated to the non-USD components of your numeraire basket. So, if macro risk-on/risk-off are the primary drivers of your pegged asset's tracking error, it would seem that your pegged asset would tend to have less volatility than USD if a GDP-weighted basket of major currencies is your unit of account.

chrisbaker984 yıl önce

The point is that their prices are less volatile than the prices of "real" cryptocurrencies like Bitcoin.

anigbrowl4 yıl önce

My first and only experience with stablecoins was when I moved a bunch of Stellaris into one and when I went back to do another transaction a few days later its value had been reduced to zero for 'technical reasons' that I am still unable to comprehend. Whoever was operating it basically helped themselves to a year's worth of investment gains, which soured me on the concept.

[deleted]4 yıl önce

grey-area4 yıl önce

If a stablecoin is fully backed by USD, why does it exist?

The only reasons for these coins to exist are:

1. Avoid proper financial controls and regulations imposed on real currencies and operate illegally. 2. To separate fools from their USD and replace it with USDT or whatever.

zeven74 yıl önce

This is akin to asking why commodity futures exist. It's an abstraction that provides utility. In the case of commodity futures, it allows commodities to be traded on an exchange where bags of onion seeds would otherwise be difficult to trade. In the case of USDC it allows USD to exist on the blockchain so that it can interact with smart contracts.

Believe it or not, if you want to invest in gold, the only option isn't buying and storing physical gold in your home. That might even be a dangerous idea.

Stocks are certificates which claim partial ownership of a company. But how can owning a piece of paper be like owning a part of a company? What is a company anyway but an abstraction over the concept of group liabilities, assets, contracts, and actions? Or do you think companies only exist to allow people to break laws under another identity?

JackFr4 yıl önce

> In the case of commodity futures, it allows commodities to be traded on an exchange where bags of onion seeds would otherwise be difficult to trade.

That is not essential to what futures do. The essence of a future, is that it is a trade that is agreed upon today, but which settles in the future. I sell my corn to you at a price we agree on today for delivery in 3 months. That allows producers and consumers of commodities to reduce risk, while speculators can increase their risk.

Also -- weird but interesting -- the https://en.wikipedia.org/wiki/Onion_Futures_Act bans trading futures contracts on onions (and motion picture box office receipts). Not sure if that would apply to onion seed.

zeven74 yıl önce

"Onion seeds" was a metaphor for future onions.

grey-area4 yıl önce

The question is, what utility?

Thanks for the usual collection of talking points from 2017 that nobody uses in the real world. There is no utility to these blockchain tokens except to scam others.

sam_goody4 yıl önce

Americans that frequently need to transfer money (especially overseas) may find stablecoins a good way to effect that without bank fees and delays.

Other countries may not even be allowed to transfer from their bank overseas (I think China in most cases). Some countries have local currency that is devaluating, and banks that are less reliable than a mattress. Some countries have restrictions on the way that money can be stored or retrieved that basically mean that money deposited in the bank can not practically be withdrawn.

For some, the stablecoin is simply a more convenient bank that the one in the city, and in many cases they anyways don't have reportable income.

Other reasons exists for a stablecoin besides criminal activity, especially for people that live in poorer states - and these people are harder hit by losing their cash than would be someone who is in crypto for the ride. It is disingenuous to think its all crypto kiddies.

philippejara4 yıl önce

he already specified it in is his comment: > In the case of USDC it allows USD to exist on the blockchain so that it can interact with smart contracts.

if you wanna question whether smart contracts are useful or not feel free, I sure do, but drop the smarminess when the answer to your question lies within the first paragraph.

grey-area4 yıl önce

Yes, strangely enough, that is exactly what I’m questioning!

They are a terrible idea whose time came and went around 2017.

kyleee4 yıl önce

You are not really questioning, as that would imply you are interested in and/or listening to answers.

It’s more accurate to say that you are “proclaiming”, which is perfectly fine, but doesn’t make for great conversation

zeven74 yıl önce

Those are not the only possible reasons for stable coins to exist.

The obvious other reason is to use them on the blockchain. You cannot use USD on the blockchain.

Maybe you don't think there's anything of value on the blockchain and that's why you don't see a use for it. I don't want to get into an argument over whether blockchain tech has a use case or a future in this comment chain, but for the sake of understanding what stable coins could be used for just grant the following:

- There is some use for ETH out there that doesn't involve avoiding financial controls and regulations or separating fools from their USD

If you will grant that, then it's easy to see why here would be a use for USDC or similar. ETH price fluctuates. If you need to be able to utilize Ethereum, it's helpful to have value on it. If you don't want that value to fluctuate, you can hold it in USDC and convert to ETH when you want to use it. Plain and simple, this is the first application for stable coins.

If you will not grant that there is a use case for ETH then there's no point in having a discussion about stable coins anyway. That's a separate discussion that needs to be had first.

Hasu4 yıl önce

> There is some use for ETH out there that doesn't involve avoiding financial controls and regulations or separating fools from their USD

I do not grant this, because Ethereum has been around for 7 years and no such uses have materialized yet.

zeven74 yıl önce

Ok, then there's no point in having the stable coin conversation.

PKop4 yıl önce

It's obvious why it exists. Dollar liquidity inside of the crypto network ecosystem. You can quickly move out of volatile assets into stable coins. You can transfer these stable coins quickly into and out of wallets and contracts. You cannot do either of these as efficiently with pure fiat which would then require an "IOU" from an exchange which would be less transferable, require trust of the exchange, and would insert friction moving into or out of the $.

pclmulqdq4 yıl önce

If you want to use dollars in a smart contract or otherwise in the crypto "ecosystem" (holding them in a wallet), they are useful. If I were Goldman Sachs, I would have made the "GS Cryptodollar" by now, but we're stuck with weird and untrustworthy stablecoins like Tether and USDC.

By the way, the concept of a "stablecoin" (defined as a currency located in a separate financial system than its home) isn't new - you can buy eurodollar futures which are futures on dollars that are physically located in Europe. Ironically, you can also buy euroeuro futures contracts which are for euros located in the US: the euro- prefix on a currency just means "not delivered inside sovereign borders, although the European eurodollar is by far the most important of these.

MomoXenosaga4 yıl önce

notch656a4 yıl önce

More like they trusted two (well actually three if you count US gov) centralized entities instead of one. It's like asking permission from both momma and pappa to eat desert. They should have just depended on the single entity backing USDC rather than putting themselves in a situation where they'd be also be fucked if Binance froze by leaving their tokens on exchange.

When you put USD backed stablecoin on exchange you're trusting

1) Exchange won't fail

2) Backers won't fail

3) US gov won't fail

Any single one fail and you're fucked. America decided dollars should float in the 70s, and most of the world followed. IMO sooner or later crypto will end up all floating because pegging relies on centralized points of failure and eventually people will tire of getting wiped out.

nordsieck4 yıl önce

> America decided dollars should float in the 70s, and most of the world followed.

Except that a bunch of countries in Europe went back to pegged currency with the Euro[1]. Part of the reason the 2008 crisis hit countries like Italy, Greece, and Ireland so hard.

---

1. Yes - the Euro is not technically pegged; but effectively, it's the same thing. Each individual country in the Eurozone can't engage in independent monetary policy.

MrRadar4 yıl önce

I mean, the US Dollar is a "pegged" currency under that definition too. A while ago I read an economic analysis that said the US would optimally have five regional currencies (instead of the single one that it has today) to account for internal trade and wealth imbalances.

What makes the US dollar work in practice is the active role the federal government takes to internally rebalance the economy through taxation and spending, particularly with defense spending and social programs like Social Security, Medicare, and the FDIC. People in wealthier states (including myself) like to complain that we get a bad deal because we get less back from the federal government than we pay in but that's a crucial feature of the system that keeps it from getting too unbalanced.

Additionally, in the US the federal government (for all practical purposes) is not required to maintain a balanced budget while the state governments are. This constrains the ability of state governments to issue too much debt while still providing a relief valve for emergency spending needed during economic downturns or other crisis (such as the COVID-19 pandemic).

I expect that sooner rather than later the countries that have adopted the Euro will evolve a similar system, shifting the bulk of the costs of their social programs (pensions, unemployment insurance, medical care, banking insurance, etc.) to the EU itself and giving the EU the power to tax and borrow as needed to maintain those programs. It will be a hard sell to Europe's wealthier economies, since it would be a major transfer of their wealth to Europe's poorer economies, but I suspect a future crisis will force their hands if the alternative is the dissolution of the EU (Brexit has shown everyone how badly leaving the EU can hurt).

nordsieck4 yıl önce

> A while ago I read an economic analysis that said the US would optimally have five regional currencies (instead of the single one that it has today) to account for internal trade and wealth imbalances.

That seems pretty silly on its face, but I suppose I've been persuaded of stranger things with a good argument.

> I mean, the US Dollar is a "pegged" currency under that definition too.

Yes and no. My point about pegging a currency really is about organizations that tax, borrow, and spend a currency they control. So the US Government has nothing to worry about in that regard. But all of the sub divisions definitely do - various states, counties, and cities regularly flirt with bankruptcy from time to time.

> I expect that sooner rather than later the countries that have adopted the Euro will evolve a similar system, shifting the bulk of the costs of their social programs (pensions, unemployment insurance, medical care, banking insurance, etc.) to the EU itself and giving the EU the power to tax and borrow as needed to maintain those programs. It will be a hard sell to Europe's wealthier economies, since it would be a major transfer of their wealth to Europe's poorer economies, but I suspect a future crisis will force their hands if the alternative is the dissolution of the EU (Brexit has shown everyone how badly leaving the EU can hurt).

I think, that will be a difficult decision point for the EU. I'm just not convinced that enough members want the "United States of Europe". National identity is much stronger in Europe than it ever was in the American Colonies pre-Constitution.

ivan_gammel4 yıl önce

It will be the last in the long chain of decisions that will span over a few decades, and as such will likely be digestible for the majority. EU was never fast, but at the same time it was consistent in integration effort.

HillRat4 yıl önce

Turns out having a monetary union but not a fiscal one is really destabilizing when things go wrong!

KarlKemp4 yıl önce

The Euro was introduced 23 years ago. It has successfully weathered one domestic crisis in addition to the dot-com bust and the 2008 US banking meltdown. Its exchange value has been stable and the Eurozone economies have fared better than, for example, the UK.

I'll take the Euro over any cryptocurrency any day, thanks.

from4 yıl önce

https://data.worldbank.org/indicator/NY.GDP.PCAP.PP.KD?locat...

On a PPP adjusted basis Italy/Spain/Portugal are no richer than they were 20 years ago. They can no longer devalue their currency like they used to when they ran into trouble.

govg4 yıl önce

In terms of the Euro, I find it more useful to view the Eurozone as somewhat similar to the US. There's one central monetary policy for really large economies that in a different environment, would have liked to do things independently. It's especially relevant now as US states have GDPs comparable to the Eurozone constituent nations.

nordsieck4 yıl önce

> In terms of the Euro, I find it more useful to view the Eurozone as somewhat similar to the US. There's one central monetary policy for really large economies that in a different environment, would have liked to do things independently. It's especially relevant now as US states have GDPs comparable to the Eurozone constituent nations.

There is an enormous difference, though: internal mobility/identity.

Germans tend to strongly prefer living in Germany. Greeks tend to strongly prefer living in Greece.

People in Oregon and New Hampshire tend not to have very strong affection for their state.

Which means that, if one area is economically depressed at the same time that another area is booming, the problem tends to sort itself out as people move from the struggling area and to the prosperous one.

In Europe, that just doesn't happen to nearly the same extent.

JumpCrisscross4 yıl önce

> People in Oregon and New Hampshire tend not to have very strong affection for their state

No, but people in the South have an affinity for the South and people in coastal cities have an affinity for those, too.

brewdad4 yıl önce

> People in Oregon and New Hampshire tend not to have very strong affection for their state.

Did you miss the article last week on HN where 60% of American adults live within 10 miles of where they grew up? People in the US absolutely have a strong affinity for their states. Just as in the EU, they may choose to leave for better opportunities however.

jimbob454 yıl önce

People in Oregon and New Hampshire tend not to have very strong affection for their state.

This sounds like the opinion of a European who has never actually lived in the US. People are much more married to their states than it seems that you'd believe.

danaris4 yıl önce

And even moreso to their cultural regions.

While someone from (say) Connecticut might not think much of moving to Maine, they would probably feel different about moving to Iowa, Washington, or Alabama.

Here's one of the various maps I've seen of US cultural regions: [0]

It seems to be accurate for the areas I know anything about; I can't speak for it in other places.

[0] https://preview.redd.it/ntsqzyp8uq531.png?auto=webp&s=afb643...

notch656a4 yıl önce

Just bringing your stuff with you from one state to another could make you a felon, making people very locked in from moving across certain states. Someone in Idaho would become a felon for bringing their (Idaho legal) AR-15 into California while the person in California would become a felon for bringing their (California legal) weed plant into Idaho.

A lot of these states have backdoor ways of keeping out culturally incompatible folks from moving state to state by making mere victimless possession of certain items disproportionately linked to certain American cultures into felonies.

MomoXenosaga4 yıl önce

Lots of young people in Greece who actually want a job and career prospects move.

This is not new in the 17th century Dutch VOC ships were crewed by destitute Swedes and Germans. Mobility in Europe is high which is why you can get excellent baklava and spaghetti as far as Helsinki. This is why the European Union makes sense.

govg4 yıl önce

I can't comment on Europe simply because I haven't lived there, but in my experience the US isn't at all like you mention. Sure, there might be states where people are willing to move, but if you think of cultural regions more and states less, people never leave certain areas their entire lives. I'm talking about areas like PNW, New England, Upper Midwest, Southern states and so on. This is very similar to your case, it is just that the US is far more fragmented in some sense, and some states can be similar to others.

klodolph4 yıl önce

Just to pick an example like “PNW”, if you look at a city like, say, Portland, less than half (44%) of the residents are from Oregon at all.

https://worldpopulationreview.com/us-cities/portland-or-popu...

If you look at where people migrate from,

https://depts.washington.edu/moving1/Oregon.shtml

California and Washington are the major sources (of course!) but (1) California is not PNW, and (2) places other than CA/WA contribute many more migrants.

tacker20004 yıl önce

What are you talking about? The euro is NOT pegged and your last sentence doesnt change that.

hardlianotion4 yıl önce

OP just meant that countries adopting the Euro lost the ability to conduct independent monetary policy, similar to if they had pegged their currency.

gpderetta4 yıl önce

A bunch of currencies were pegged to a virtual euro a few years before its actual introduction, but those currencies do not exist anymore, so to say they are still pegged doesn't make any sense.

[deleted]4 yıl önce

notch656a4 yıl önce

Euro floats.

klodolph4 yıl önce

Comment is saying that having Euro as your currency is, in some ways the same as pegging your currency to the Euro. As in “1 Ireland Euro” equals “1 German Euro”.

lallysingh4 yıl önce

America went back to floating in 1971. The convertability with gold was only around for 17 years [1]. I don't know why that's relevant to USDC - there's no absolutely stable store of value, everything fluctuates.

USDC doesn't sound tenable.

[1] https://en.m.wikipedia.org/wiki/Bretton_Woods_system

thedangler4 yıl önce

And it will eventually because the FED turned off the fractional reserve requirements.

On March 15th, the Fed lowered the fractional reserve requirement to 0%. Yet, since that day banks have been hoarding cash like never before. pic.twitter.com/jpYF4Ypzjq — Mati Greenspan (tweets ≠ financial advice) (@MatiGreenspan) April 13, 2020

So, a bank can lend out what ever it wants. This is why inflation is high all over the world and the currency milkshake theory is playing out.

"Here's a simplified version: All currencies are doomed because they're not actually valuable. The dollar is slightly better because it's the favorite child. When the Fed stops making more dollars — the frothy “milkshake” — demand for existing dollars goes up.Jul 19, 2022" -- Bloomberg

capitalreqs4 yıl önce

Reserve requirements aren’t relevant anymore because capital requirements have largely taken their place. Capital requirements are not zero.

selectodude4 yıl önce

Furthermore, capital requirements are better than reserve requirements for us, the taxpayer, because we’re not paying interest on those reserves.

jasonlingx4 yıl önce

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-a...

kikokikokiko4 yıl önce

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.

MacsHeadroom4 yıl önce

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/

atarashi4 yıl önce

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."

matthewdgreen4 yıl önce

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.

nibbleshifter4 yıl önce

> But I haven't verified.

Offhand, I can't think of a fast and easy way to verify this reliably.

matthewdgreen4 yıl önce

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... [2] https://www.binance.com/en/collateral-btokens [3] https://etherscan.io/address/0x47ac0fb4f2d84898e4d9e7b4dab3c...

kikokikokiko4 yıl önce

So, it's just like the deposits on FTX, or the reserves of Tether right?

danuker4 yıl önce

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-E...

[2] - https://www.youtube.com/watch?v=-whuXHSL1Pg

CTDOCodebases4 yıl önce

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.

MacsHeadroom4 yıl önce

FTX international was not regulated and Tether is debt backed. So no it's not like either of those things.

kikokikokiko4 yıl önce

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.

MacsHeadroom4 yıl önce

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/

[1] https://www.dfs.ny.gov/industry_guidance/industry_letters/il...

[2] https://www.withum.com/

kikokikokiko4 yıl önce

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?

jerf4 yıl önce

'So effectively, Binance is refusing to honor its commitment to depositors to give them their money on demand. That's called a "default."'

Not in $CURRENT_YEAR it's not. In $CURRENT_YEAR it's not a default until the holder in question publicly and willingly admits it's a default. Otherwise, it's just a technical maintenance period, or a temporary suspension of withdrawal rights, or a customer-value preserving intervention, or a response to current market conditions, or just another step on our amazing journey to world-class reliability and customer satisfaction, or whatever, and only crazy conspiracy theorists who are probably going to be happy staying poor would say that a default is as simple as "you ask for something that is yours and you don't get it", regardless of the reasons why you don't get it.

That is sooo $CURRENT_YEAR-1 of you to think something so simplistic and unsophisticated. Clearly there are just a ton of reasons why you might ask for something that is yours, and not get it, that aren't anything as ugly as a default. Please. So plebian. And I can hardly believe that some knuckle-dragging cretins think a default should be treated by everyone as a default rather than just sort of glossed over with a vaguely stern look on your face before proceeding on as if nothing has happened.

(For a bit of context, it's not just the cryptocurrency space that has forgotten the fundamentals lately & I have to admit I'm getting a bit crabby about it. There is a time and a place for nuance, and there is a time and place for stubborn insistence on basic facts of reality and waving away any attempt at "nuance" as obfuscatory lies. The definition of default is one of them. Either you return my stuff on demand or you don't. Explaining why you failed your obligations does not mean that you met your obligations.)

bellip4 yıl önce

Yes, it's digital already. However banks manage the whole system and they can do whatever they want with your money if you are nobody.

I have been waiting for 2 and a half months for an international payment via SWIFT, I worked long hours for that money and I needed it urgently. The money left the sender's account 2 and a half months ago. Neither of us has the money in our accounts while the bank tells us to just wait a little bit longer, or they do not know where the amount is, some nonsense about beneficiary bank holding/releasing my money. Whereas a friend just sent me a hefty figure (mid 5 figures) of crypto by withdrawing it out of Binance Global to my personal wallet, it was confirmed in 15 minutes and I got the money in my account in 10 minutes. I sent the crypto to my local (Binance has different companies/legal bodies in different countries) Binance account, converted it to a currency of my liking and withdrew it to my personal bank account. All under 20-30 minutes and I have the money now.

Not endorsing Binance or any other central exchange (my personal position is: not your keys, not your coins, I would never hold a big amount in any central exchange), but I do not understand HN's (majority of HN's) position against crypto in general. Maybe you are privileged enough to never have this kind of issues, but some of us do. Some of us live in countries with hostile governments, (which government isnt hostile towards the public anyways? /s).

gamblor9564 yıl önce

SWIFT does not take 2 months; it takes minutes or hours. Your bank already has your money or it never received it.

More likely, they are holding your money due to some issues with your local KYC laws. (This is especially likely in South America, where foreign senders must verify the source and purpose of payments made to local residents.)

xboxnolifes4 yıl önce

Either way, they haven't received the money.

kimixa4 yıl önce

Yes, but the same issue will likely occur for any other large transfer of value, be it on the blockchain or a briefcase of cash or anything else. The wording of the regulations may not have caught up, but their intent is to regulate all wealth transfers.

Unless you're avoiding the regulation and just not reporting it, of course, which is likely illegal depending on the jurisdictions involved.

nibbleshifter4 yıl önce

Sometimes wire transfers mysteriously fail for no reason, in particular between US and EU banks.

I've had this issue with being paid before, nobody could tell me why the transaction would mysteriously fail.

gamblor9564 yıl önce

Agreed, but in this case the OP says that the bank acknowledges receiving the money, and simply won't release it to his account.

That means KYC or source-of-income laws are applying (I don't know what country OP is in so I can't say which).

bellip4 yıl önce

Sorry for not being specific enough, let me give more details about the incident. My bank tell me they can see the transaction but it is not approved so they cant do anything about it and recommend me to contact with the sender's bank. Sender's bank tells the sender that the amount is held by the beneficiary bank and they can not do anything about it either. At some point, sender's bank told the sender that the beneficiary bank released the payment (around 25-30 days ago), but the transaction is still not completed anyhow. Weird thing about this is, the amount is very small (around 1k EUR), and I have received 20-30 payments from the same sender, same bank in the past 4 years. The most troubling part is, I or the sender, can not take any action to fix the issue and the neither bank tells us what the issue is or recommends us an action to fix the issue.

I am not saying this happens all the time, or all SWIFT transactions are flawed by nature, but this occurring even once is enough for me to be in a very stressful situation without any remedy.

hef198984 yıl önce

It seems FTX was perfectly able to do whatwver they wanted, through Alameda, with customer deposits as well. Banks on the other are much better regulated, and for very valid reasons as current events show.

landemva4 yıl önce

Which bank provided the gateway for Alameda to send/receive from the legacy banking system? There may be some regulator questions for that bank's compliance team.

https://www.ledgerinsights.com/senators-quiz-silvergate-bank...

gpderetta4 yıl önce

Couldn't the transfer from Binance to your bank account take two months as well in principle?

bellip4 yıl önce

Of course, I guess that can happen if the bank decides so as well, but the transaction from local Binance bank account to my local bank account is not international and not via SWIFT (correct me if I am mistaken), so far those transactions have been always completed instantaneously (under 5-10 minutes) since they are domestic transactions (?).

To be fair, almost all of my international SWIFT transactions, except this one, have been completed in 6-10 business days (it's not so bad and I can live with it, as long as it doesn't take 3 damn months).

rvz4 yıl önce

> Maybe you are privileged enough to never have this kind of issues, but some of us do.

Correct.

The eternal hate for crypto is by a screaming minority who are too privileged to even bother realising the majority of people are worse off in countries like Argentina, Nigeria, and Turkey which their currencies have lost over 80% of their value and is quite frankly worthless.

Using USDC as a cheap, fast, global way of sending money is a good alternative for those that don't have a choice in those countries. For those that keep shouting the existing solutions: Wise is neither same day or cheap to send money globally, . Same is true with SWIFT. FedNoW only works in the US and is not global and UPI is also not global.

Crypto and stablecoins tick all the boxes as a 24/7 cheap and very fast way of sending money globally.

hef198984 yıl önce

The vast majority of people in those countries either go for USD, Euros or are too poor to bother with crypto. Portraing crypto as anything but privileged people's latest hot investment vehicle to become rich, fast, is just plain wrong.

mrep4 yıl önce

> The eternal hate for crypto is by a screaming minority who are too privileged to even bother realising the majority of people are worse off in countries like Argentina, Nigeria, and Turkey which their currencies have lost over 80% of their value and is quite frankly worthless.

So like 5% of the world population in your examples...

jaltekruse4 yıl önce

I think there is an important missing part of this argument that many of the current paths to move dollars around that network in the traditional system take either days to settle and/or cost quite a lot in fees. I see crypto having potential to optimize lots of things and introduce extra trust from a technical infrastructure standpoint. Right now my traditional money is sitting in several digital banks or brokerages that I have no idea how well made they are underneath, I just see a website I can interact with. Crypto doesn't solve problems about where the coins meet the real world, even a stable coin with publicly auditable holdings to back it can have secret debt leveraged against those assets. Those problems seem only possible to resolve with regulation as it has been with the traditional financial system, but standardizing protocols to move money around and reducing lead time and/or fees as crypto evolves could really help the financial system be more flexible. With everyone carrying around a smartphone it really should make us question why so much money needs to move through the major credit card networks, we don't need their special hardware anymore.

markonen4 yıl önce

You can absolutely regulate towards the goal of affordable, instantaneous money transfers within the context of the traditional finance system. The EU has done just that with SEPA (Single Euro Payments Area).

Here's the SEPA instant credit transfer service (maximum duration of ten seconds): https://www.europeanpaymentscouncil.eu/what-we-do/sepa-insta...

MrRadar4 yıl önce

Next year the Federal Reserve will be launching their FedNow service which should provide equivalent functionality to Europe's SEPA or Canada's Interac service.

jaltekruse4 yıl önce

Unfortunately the current (and seemingly somewhat inevitable) architecture of cryptocurrency, relies on trustless distributed systems, which I don't see a clear path to making them give similar SLAs or UX to the traditional system with centralized authorities and defenses against "double spending", which really just isn't discussed outside of crypto because it was such an obvious thing to solve for our current system makes it so close to impossible (and that is part of the reason for the lead times discussed in my previous comment).

twelve404 yıl önce

how about risk management? when i pay using a credit card, i know if things go sideways i can always dispute and most likely will get my money back. If I pay with bitcoin or even with cash or checks, i'm fucked. Not sure if Visa/MC duopoly specifically is the most efficient way to handle this risk, but it is a thing.

P.S. also too not sure how special credit card hardware is a problem anymore, if you want to pay with your phone, there are more and more options every year to do that, and even tie that to a credit card (for benefit of risk and/or points).

xapata4 yıl önce

The credit card companies have built trust with merchants around the world that they'll settle up eventually, and that anyone (or most people) carrying their cards will pay their bills. If a cryptocurrency system were to try to supplant that, it'd need a form of revolving credit. I want to pay my bills at the end of the month, not immediately.

dboreham4 yıl önce

Wait...they're refusing to allow on-chain transfer of USDC from their custodial account to a customer's wallet? I assumed this was about exchange of USDC to fiat, hence the hand waving about banks.

wmf4 yıl önce

So let's imagine that Binance has $4B of USD customer liabilities backed by $2B of USDC and $2B of BUSD. Fully solvent and fully liquid. Then customers try to withdraw $3B of USDC which Binance does not have. Binance would be happy to give you BUSD but for whatever reason customers specifically want USDC.

(I am absolutely convinced that Binance is evil but this specific situation does not appear particularly bad.)

kikokikokiko4 yıl önce

hedora4 yıl önce

In the hypothetical situation, both the BUSD and USDC are fully backed by USD. However, from an external observer's perspective, it is indistinguishable from the case where $1-2B USD is stuffed in a mattress in a country without extradition treaties.

(Which is why regulated financial institutions are externally audited and stuff.)

neeleshs4 yıl önce

In general I agree crypto feels like ponzi. But in this specific case, they seem to be fully solvent relative to US dollars? If clown money was floating, it would definitely be iffy. But it's tethered to the dollar. It's almost an IOU in that sense relative to the dollar. They don't have enough specific "currency" (usdc), but as long as I can withdraw to USD, it is not a scam.

wmf4 yıl önce

BUSD is not clown money; it's pretty tightly regulated by the state of New York.

It looks like Binance just redeemed $700M of BUSD, presumably to convert it to USDC. https://twitter.com/whale_alert/status/1602741130394845185

senko4 yıl önce

So, it's a liquidity problem, not a solvency one, got it.

fallingknife4 yıl önce

Not your key, not your crypto.

vkou4 yıl önce

This seems like a major bug with crypto. I don't have physical possession of my bed when I get up from it and go to work, but I've yet to come home and discover a grifter, or conman sleeping in it.

Likewise, if I lose my car keys, society still manages to acknowledge that I am still the owner of my car.

fallingknife4 yıl önce

And there's the much more important case. What if someone gets your keys? With bank fraud you will most likely get the money back. With crypto, not a chance.

nibbleshifter4 yıl önce

There's a variety of "social recovery mechanisms" being worked on in ETH land, at least.

dboreham4 yıl önce

Definitely, but why would they not be able to submit a txn to the chain to move a token balance "because bank closed" ??

vrc4 yıl önce

Likely a lie for less savvy investors. Or they need cash to recapitalize before being able to transfer to wallets. Or people are withdrawing to fiat which would need a bank in many cases. My money is on it being a combination, but that they definitely don’t have reserves to cover a mass run on USDC.

fallingknife4 yıl önce

Because the tokens aren't there. The web UI says they are but what's on the chain? You don't know because you don't have the keys. Hence my previous comment.

trotro4 yıl önce

> You "need" a stable coin because you're trying to have your cake and eat it too: US dollar-like liquidity and value preservation without US dollar financial regulation.

What about transferring value anonymously? Apart from cash and stable coins, every way of transferring stable assets (wire transfer, Venmo, WU,...) requires a copious amount of KYC and hence a complete loss of privacy (as well as serious security risks given how some of these private companies can misuse personal data).

I don't mind people criticizing Binance, CEXs, and even the crypto industry in general, but I find it quite sad to see people, especially here on HN, essentially advocating for the end of any sort of financial privacy.

nibbleshifter4 yıl önce

> essentially advocating for the end of any sort of financial privacy.

See the recent thread about cash transaction limits in the EU, an awful lot of HN users celebrating further restrictions that limit/erode financial privacy.

[deleted]4 yıl önce

soerxpso4 yıl önce

> So effectively, Binance is refusing to honor its commitment to depositors to give them their money on demand. That's called a "default."

What? So if I go into the bank at 4 AM and ask to withdraw $100,000, and they respond, "Sure, we'll need a few hours to get those funds together," the bank has defaulted?

Gwypaas4 yıl önce

Brokers are not banks. For real financial systems your stock are held 1:1 in a custody account in a separate company with regulations making sure you get to keep your stock even in the case of bankruptcy of the broker.

You can sell all your holdings at any second during the trading hours, no delay, the only problem you might face is that no buyers exist. That is something completely separate though.

What the crypto exchanges are doing is taking the Apple stock you think you bought and instead buy Wal-Mart. Hoping to pocket the difference when you eventually sell.

This works when the line goes up, or when you are a incredibly tightly regulated bank where the government through FDIC like schemes ensure that you will get your money back, even if the bank screws up.

https://en.wikipedia.org/wiki/Deposit_insurance

hef198984 yıl önce

Cash withdrawls have a ohysical aspect, cash. In the case of Binance, there is no such aspect. Obviously, banks have limits around cash withdrawls not the least due to limited amount of cash at hand at a given sight. Banks will happily allow you to wire transfer money wherever you want, since this is only a virtuap things and banks are required to have enough liquidity to serve those requests.

Crypto is no like cash.

DSMan1952764 yıl önce

If I understand the Binance situation correctly they do not claim to be holding USDC for you, if you give them USDC then they convert it to their BUSD token (also a stable coin) and that's what's listed on your account. So when you withdraw your BUSD to USDC, they may have to go buy some USDC to actual service your withdrawal.

I don't use them, I'm going off of this page: https://www.binance.com/en/support/faq/what-is-busd-auto-con...

dheera4 yıl önce

Presumably they just need to wait until 9am when people at work, so I wouldn't consider that a default.

If they say they need a few hours at 9am, they've defaulted. It would be a big "ha" if they couldn't get them together by 9:05am because they've done shady things with your money.

neeleshs4 yıl önce

Umm.. that's not how banks operate. If I want to withdraw a million in cash, it is reasonable for the bank to ask me to wait until it mobilizes the cash. If they don't let me transfer money to another bank/account, that's problematic.

locallost4 yıl önce

I'm not a fan of crypto, but that sounds like a stretch. I'm not aware you can go into any bank and withdraw e.g. a million just like that. It could be different in different countries, but there is a limit to what you can get done.

It could be careful manipulation on Binance's part, but we'll find out soon enough.

driverdan4 yıl önce

That's not how banks work. You can't go into a bank and withdraw $100k in cash. Most banks don't hold that much cash.

mikeyouse4 yıl önce

Yes they do... and if it was an exceptionally small bank that didn't have it at the moment, with a day or two notice, they'd happily give you $100k in cash after receiving it from the Fed or from their vault cash providers. A busy ATM will contain more than $100k and on premises ATMs are often refilled from the bank's vault.

aclatuts4 yıl önce

Most Canadian banks need a few business days just for 5 thousand and above in cash. There is more zeros in bank accounts there is physical money in circulation.

dheera4 yıl önce

Yep it's basically legalized fraud, we take it for granted that that's how the system works, but still fraud.

Rich people like banks can basically create money that doesn't exist, while average Joes cannot.

jki2754 yıl önce

Do you believe that banks hold every dollar they receive in deposits in cash in their vaults?

Because that's not how banks work at all. They make loans, and if enough people demand their cash back they will have to move things around to honor those withdrawals. That's how every bank in known history has operated.

Exuma4 yıl önce

That's not how banks work

flamemyst4 yıl önce

You misses where Binance doing automatic conversion for any deposited USDC to BUSD. So every USDC deposit will counted as BUSD.

Withdrawal using BUSD and USDT is still available. Even USDC on some chain are still open. As I understand they just need time to replenish their USDC.

BUSD is released by Paxos.

datadata4 yıl önce

You could say the same thing about Eurodollars-- "US Dollar" denominated assets that are held in banks outside the United States and not subject to US Bank regulations. The size of this market is more than 10x all of crypto.

BobbyJo4 yıl önce

You could an you'd be right. Although, then you are trading one regulatory body for another, which you can do pretty freely with currency trading.

Crypto is where you go if you don't want any regulatory bodies at all.

jqpabc1234 yıl önce

Crypto is where you go if you don't want any regulatory bodies at all.

Crypto is where you go if you are naive enough to believe that technology can be an effective substitute for financial rules and regulations.

2OEH8eoCRo04 yıl önce

> I'm frankly amazed that people with the ability to understand this alphabet soup mumbo jumbo keep falling for the same scam over and over again.

They say a lot of words but they don't understand them. Also greed and pride.

autokad4 yıl önce

I'm really shocked more aren't talking about how binance 'failed' an audit for proof of reserves.

vkou4 yıl önce

These aren't fractional reserve systems, a fractional reserve system requires liquid and illiquid assets to exceed liabilities.

This is just a fraud. :) You can tell, because they seem to be incapable of passing anything resembling an audit.

capableweb4 yıl önce

Not saying the rest of your comment is right or wrong but this part sticks out:

> It's traded the world over by almost every country whether they want to or not. You can buy almost anything there is to buy with US dollars.

That's definitely not true. Most places in the world, I'd wager, do not accept USD, as you seem to think. I can't even begin to count the times I've seen clueless American tourists in South America, Africa, Europe and Asia trying to pay with their "highly regarded" USD and being denied with laughs. And then being shocked at the results.

axoltl4 yıl önce

I don't think the parent comment was referring to buying an ice cream cone, but rather things traded on the open market.

notch656a4 yıl önce

Lol almost no one in South America is laughing at USD. I've been to 3 of the 4 continents you mention and spent USD directly in all of them but Europe. Hello in many south america countries you get better prices even adjusted for true exchange rate because no one wants dog-shit <national currency> and it saves them a trip to the money-trader before their money turns into kindling.

jen204 yıl önce

You can also spend them in several places in Europe with ease, albeit at an exchange rate that means you should not.

three_seagrass4 yıl önce

>I'm frankly amazed that people with the ability to understand this alphabet soup mumbo jumbo keep falling for the same scam over and over again. Underneath all of the slick marketing and nerd posturing is a simple truth: these are all fractional reserve systems. Conceptually, they are no different than banks or pyramid schemes.

There are rational people who knowingly invest in ponzi and other schemes because they think they can get out before the music stops playing.

Some ultimately do, and some ultimately get caught.

TimJRobinson4 yıl önce

> The only possible reason you want a stable coin, rather than dollars, in the first place is because you're doing something that requires you to route around US financial regulation.

This reeks of US centric privilege. Very similar to "the only people that want privacy are criminals". There are plenty of countries that you can't access UD dollars that would prefer to hold them than their own currency.

yashg4 yıl önce

Also pumping the price of a token without putting in actual money. When you can issue unlimited number of casino chips, you can sell an imaginary asset using as many chips as you want. Better still, get all casinos to accept each others chips to buy and sell those imaginary worthless tokens to lend credibility to chips and tokens.

rodgerd4 yıl önce

> I'm frankly amazed that people with the ability to understand this alphabet soup mumbo jumbo keep falling for the same scam over and over again.

You can't cheat an honest man, but it's easy to scam people who think that they've found a loophole.

nathias4 yıl önce

yes, of course the goal is to avoid US dollar, and no not all stable coins are fractional reserve systems

TacticalCoder4 yıl önce

> You "need" a stable coin because you're trying to have your cake and eat it too: US dollar-like liquidity and value preservation without US dollar financial regulation.

That is not at all why people need/want USDC. People want stable coins because banks are all too happy refusing/blocking/reversing transactions to/from cryptocurrencies exchanges.

They hypocrisy of both banks and the states on this one is amazing: "it's all a ponzi" / "it's all criminal money" / "only fraustres use cryptocurrencies"

But then...

"Please pay your due taxes made on crypto".

FWIW France, at least, took a less dumb approach than many on the subject: conversions to/from crypto and stablecoins aren't a taxable event. It's only if you manage to cash out (and that's a gigantic "if") to actual EUR that taxes to the state are due. It solves at least the problem where people legally need to pay taxes but concretely cannot get money out of the crypto exchanges.

Sending from, say, Coinbase to a bank for tiny amount is relatively easy. But I'm atm helping someone "cash out" a 7 digits sum in France and it's hard. Extremely hard. It's near impossible actually to get one bank to approve the withdrawal from Coinbase. Saying: "I entered Bitcoin in 2016 and ETH when it was at 50 cents" ain't sufficient. They don't seem to understand that the KYC/AML is done to catch drug and arms dealers, organs traffickers, and pedophiles selling CSAM.

That's why there's KYC/AML right? To catch these guys.

But a 35 years old mom who made bank on crypto? That's no pedophile. No arm dealer. No drug dealer. And yet it's not clear if she'll ever be able to cash out.

That's why people are using USDC. Credit cards withdrawing from your USDC? Bring it on. Coinbase giving x% annual return on your return, please, keep it coming (btw even in France taxes are due on these annual yield). There's a shop here selling high-end second hand watches (you know, the kind of watches worth more used than new) that accepts crypto: maybe a way to get something out of your crypto.

Now I don't know if the short term US treasuries, whose numbers are all published, backing the USDC all actually exist and are really held at BNY Melon. Maybe it's all a scam. Maybe Coinbase shall rug pull too. Maybe BNY Melon shall rug pull.

For all I know, heck, maybe Uncle Sam himself is going to rug pull on the treasuries backing the USDC (I shouldn't give these people ideas but they maybe already fancied the idea anyway: "crypto are only scams, we're defaulting on the US treasuries backing stable coins"... and many idiots would applaude).

But USDC still looks, to me, more legit than USDT / Binance USD / etc.

That's why most people are using USDC: it's the least smelly of them all and the banks do no let people easily sell their crypto for real USD / EUR.

Meanwhile, as I mentioned, the state wants its taxes on crypto gains.

It's the state and the state lovers who want to have their cake and eat it too: they want to prevent people from cashing out their crypto "because pedophiles and criminals" but still want their taxes made on crypto "gains".

That's why people are using stable coins.

If people were actually free to use their money, free to do wire transfer to/from Coinbase at will, there wouldn't be that much need for stable coins.

But people aren't free to use their money as they want.

[deleted]4 yıl önce

JetSpiegel4 yıl önce

35 years old mom would be the perfect cover for an arms dealer to cash out...

quentinadam4 yıl önce

May I suggest the below insights to your point of view, which will allow you to have a better understanding of what is happening underneath the hood ?

USDC is issued by circle.com and the underlying assets are held on US bank accounts.

BUSD, which is Binance's USD stablecoin, is actually issued by paxos.com (see https://paxos.com/busd/) and the underlying assets are held on US bank accounts .

Binance definitely has accounts at both Circle and Paxos, that allow them to mint and redeem USDC and BUSD, by depositing or (respectively) withdrawing USD to Circle's or Paxos' bank account.

In September, Binance announced that all USDC deposits made on Binance would be converted to BUSD at 1:1 (https://www.binance.com/en/support/announcement/binance-to-a...). The move was indeed an attempt to boost the adoption of BUSD, which is the third largest stablecoin with a market cap of $19B, behind USDC which is the second largest with a market cap of $43B (see https://coinmarketcap.com/view/stablecoin/).

From a practical point of view, what Binance did was redeeming the USDC (by sending them back to Circle and withdrawing USD to it's bank account) and then subsequently minting BUSD (by wiring the USD to Paxos' bank account and receiving the corresponding amount of BUSD).

Binance also allows to "seamlessly" withdraw BUSD as USDC from it's exchange to your wallet.

Now you are starting to understand what happened today.

Following negative rumours, people started to massively withdraw BUSD as USDC from Binance. Binance fullfilled to first part of those withdrawal requests from it's hot wallets containing USDC, but past a certain amount it had no USDC left and temporarily halted withdrawals of USDC. A caveat to that is that Binance only halted withdrawals of USDC on the Ethereum and Tron chains. Withdrawal of USDC to Polygon and Avalanche for example have been running smooth all day, probably because less people choose those options, so there were still funds available on Binance's hot wallets on these chains.

Once the hot wallets were depleted of USDC on Ethereum and Tron, Binance could only continue to honor the withdrawal requests by converting the BUSD it held to USDC. That conversion requires to redeem the BUSD at Paxos, receiving USD on it's bank account, sending the USD to Circle, and receiving the corresponding amount of USDC. These steps involve regular wires between banks, hence why they could not be executed before the US banks opened.

That being said, the situation is now resolved and Binance has now re-enabled withdrawals of USDC.

RobLach4 yıl önce

The moment you halt withdrawals, the jig is up.

MerelyMortal4 yıl önce

Binance has been halting withdraws on various coins for BS reasons for a while now. The jig has been up for a while, just not everyone is paying attention.

hall0ween4 yıl önce

I'm no crypto expert here, admittedly. Isn't the point of decentralization to avoid this level of control?

It's like the crypto 'investor' response is "Decentralization...that's not so important. What we really want is sheer, unaltered speculation."

kayamon4 yıl önce

Bitcoin has continued clearing transactions throughout, just as it always has since its creation.

Crypto != Bitcoin.

hypertele-Xii4 yıl önce

Except, of course, all the forks that have happened, and thus all the "old bitcoin" that no longer trade.

https://en.wikipedia.org/wiki/List_of_bitcoin_forks

spicymaki4 yıl önce

> Crypto != Bitcoin

Please explain your reasoning.

aftbit4 yıl önce

I'm not the parent poster, but I believe the explanation is:

1. "Crypto" as a space includes a lot of things like Centralized Exchanges, which are really just like unregulated banks. 2. "Bitcoin" the network is a subset of the crypto space and was not in any way impacted by whatever the latest scammy CEX decides to do.

spicymaki4 yıl önce

Thanks!

kayamon4 yıl önce

You can print more crypto. You can't print more Bitcoin.

You could make a competitor to Bitcoin, and thereby print money that way, but it takes energy. It takes energy to make new Bitcoins. And people can't use their energy for two things at once, they have to pick one. Only one blockchain can (in the long term) maintain and secure a position, the one with the longest proof-of-work chain. The others won't remain stable.

Mathematics takes time and energy. The more Bitcoin secures itself the more the other crypto gets pushed out of the mining market.

quags4 yıl önce

Nothing prevents being decentralized and continuing that route but it requires more knowledge , it is harder , still has risk and crypto would not be as large with out the central players. Centralized and regulated crypto exchanges keeping the ability to have decentralized wallets is the best of both worlds. That is the way this is going barring making it illegal to hold your own wallet or sending decentralized payments which certainly isn’t an impossible scenario.

themagician4 yıl önce

Centralization is required because not enough people are willing to spend real dollars, so no large organic P2P market exists (especially for majority of the altcoins). Instead you need central authority to make dollars, which is what all these exchanges do. They try to mask this behavior as best they can, but their purposes it to create dollars so that liquidity can be provided for those who want to cash out.

concinds4 yıl önce

The decentralised technologies are still groundbreaking and trustworthy. But you can’t market that, so it doesn’t get adopted. The lowest common denominator goes for the stuff that’s heavily advertised, like centralised exchanges (scams), stablecoins (scams), and leveraged retail investing (scam). If Tom Brady got paid to make an ad, surely that means the product is trustworthy?! You can’t fight human stupidity.

WalterSear4 yıl önce

That's not the point. It's the beard.

DebtDeflation4 yıl önce

Fun Fact - Binance is technically not headquartered in any country in the world. Originally they were based out of China, then when China banned crypto trading they moved to Japan for around a year, then got in trouble with the regulators there, left, and were trying to strike a deal with the Malta government to incorporate there, but it fell through. CZ has been saying for over a year that they will announce their new HQ location soon, but never has. They have registered subsidiaries in a few countries but at the corporate holding company level their HQ is essentially whatever hotel CZ and his laptop happen to be staying at this week.

staticautomatic4 yıl önce

That's all fine until the lawsuits start and a judge or arbitrator decides for them where their principal place of business is if they don't choose one.

jqpabc1234 yıl önce

every digital dollar of USDC can always be exchanged 1:1 for cash.

Well ... maybe not always ... and never without fees attached.

Finnucane4 yıl önce

I will glad pay you Tuesday for a binanceburger today.

japoco4 yıl önce

This is not what is happening here, the USDC peg to the dollar has nothing to do with this. The problem is that Binance converts every stablecoin you deposit there to BUSD, and so if you want to withdraw say USDC or USDT even they’d have to convert them, which is apparently what they’re having trouble to do.

jqpabc1234 yıl önce

the USDC peg to the dollar has nothing to do with this.

I never said it did.

The problem is that Binance converts every stablecoin you deposit there to BUSD

The real problem is that Binance can do whatever *they* want with your deposits --- including refuse to return them.

The real problem is that the crypto market is about as far removed from *trustless* or *decentralized* as is imaginable or possible.

The real problem is that people who say they don't trust government will readily trust FTX or BlockFi or Voyager or Celsius or Binance or Bitfinex --- all of which have been shown to be far less worthy of it in my opinion.

pyb4 yıl önce

If they need to "boost their holdings" in USDC in order for their customers to withdraw these coins, what had they been doing with their customer's deposits ?

guessbest4 yıl önce

Funny, it is an "exchange" that takes a deposit, but doesn't actually purchase the promised cryto holding until a withdraw is made.

rosnd4 yıl önce

Binance delisted USDC in september, since then the only way to "purchase" USDC on Binance has been by requesting and USD withdrawal via USDC.

sam_goody4 yıl önce

USDN is unpegged and below $0.70 [1] I don't believe they have a chance of recovery.

USDD dipped under $0.97 (the "official peg") both yesterday and today [2]. The reserves are being poured in to keep it propped up till confidence returns. Hmmmmm...

UST (Luna/Terra) is, as is well known, finally stable ;)

In the famous thread that brought down FTX, CZ accused SBF of trying to crash Tether with a paltry $250M. While I don't see how that could be, CZ knows much more than me about what is really propping up Tether, and that is a scary thought.

And now Circle is under pressure. OK, they are big, and somewhat audited, so they probably can hold up unless a LOT of customers wanted out.

Of course, if any of these exchanges or stablecoins were honest, they would have 100% of customer's funds available or close to available, and a run wouldn't be a risk. But, let's not kid ourselves - No one in this space is honest.

I can totally imagine a crash of USDN leading to a run and crash of USDD, than a bigger run on Binance and Tether. I wonder which of those two has a larger hole?

I also wonder whether a crash of a $20bn fund could cause less scrutiny on SBF? And what would happen to BTC without Tether's magical beans to prop it up?

[1]: https://coinmarketcap.com/currencies/neutrino-usd/ [2]: https://coinmarketcap.com/currencies/usdd/

4pkjai4 yıl önce

This might be why BTC is shooting up at the moment. If you can't withdraw your stable coins you might as well buy Bitcoin and withdraw that.

jscottmiller4 yıl önce

This is exactly what happened at Mt Gox almost a decade ago.

dbancajas4 yıl önce

except those BTCs are not real. They are just pretend BTC in your account. You have to send it to your wallet

roflyear4 yıl önce

No, BTC is just fairly correlated with the US stock market.

JofArnold4 yıl önce

More likely it's reacting to inflation data.

cableshaft4 yıl önce

Yeah, this is almost certainly what's going on. Lower inflation has juiced up its price in the past, same with stocks.

Several of my stock holdings are up the same amount as Bitcoin is today.

NotYourLawyer4 yıl önce

Makes sense. It’s an iNfLatIon hEdGe.

latchkey4 yıl önce

Or it could be on the news that SBF was arrested?

mannykannot4 yıl önce

If you issue a "proof of reserve report" that looks like you are trying to hide something, don't be surprised if people conclude exactly that.

tomkaos4 yıl önce

Funny that in the cryptoworld transaction is block because : "The banks are not open for another few hours"

ldbooth4 yıl önce

Yikes. This could be the first inning of the Tether bubble deflating, and by extension half the crypto market.

mjr004 yıl önce

Half is optimistic. Tether destabilizing probably drops all crypto over 90%.

Don't think it will happen, necessarily, but it's largely the only thing keeping crypto together at this point, price-wise.

yladiz4 yıl önce

Do you mean it's the only thing... tethering crypto together?

rapsey4 yıl önce

Just like the last 10 times

paulpauper4 yıl önce

We will have to wait and see

all the major stable coins still holding pegs

JumpCrisscross4 yıl önce

> the major stable coins still holding pegs

How? In what assets? Even in Treasuries, tens of billions of unexpected sales in an off run will depress prices. If deposited in a podunk bank, it might literally go under.

oneoff7864 yıl önce

Still refers to the present. You are referring to a hypothetical future.

JumpCrisscross4 yıl önce

> yoh are referring to a hypothetical future

I’m referring to the present state of their reserves. A present state which almost deterministically implies a future state under certain conditions.

oneoff7864 yıl önce

You’re still wrong though. Do these companies likely have reserves to back their coins? No. Are the pegs currently holding just fine? Yes.

Will the pegs fall at some point in the future? Maybe? Hopefully? But this statement is irrelevant to observing the current state of the pegs.

JumpCrisscross4 yıl önce

> Do these companies likely have reserves to back their coins? No. Are the pegs currently holding just fine? Yes.

Fair enough. (Though I’m unconvinced of the value of a peg that can’t be redeemed against, à la Tether.)

spookthesunset4 yıl önce

That hypothetical is reality. And sometime today, tomorrow or 10 years from now it’s gonna finally collapse. Crypto was and always will be a giant scam.

oneoff7864 yıl önce

Sure, it’s a scam. But the pegs are easily observed to be holding at the moment. There is no doubt about this. One’s beliefs need not detract from basic reading comprehension.

hef198984 yıl önce

Didn't something similar happen in 2008 as well? When mortgage backed securities dropped but the opposite default swaps (?, I'd have to look it up), didn't move?

pabber4 yıl önce

I know where the $ to cover those withdrawals came from,.

Check out the timing And the large transactions This wallet belongs to Bitfinex

This is bad , looks like Binance needed a bailout to cover withdrawals

https://etherscan.io/token/0xdac17f958d2ee523a2206206994597c...

drbig4 yıl önce

https://archive.ph/tb4rs - "Binance halted USDC withdrawals after customers pulled over $2 billion worth of cryptocurrency from the exchange Monday, according to data from blockchain intelligence platform Nansen."

JumpCrisscross4 yıl önce

> Binance Coin — a native token that is seen as reflecting customers' trust in the exchange — had slipped 5.12% to trade at just under $269 at last check Tuesday

rngname224 yıl önce

The most painful thing in my life is the fact I was sitting there thinking about putting 500-5000 usd into BNB at its token launch (for fractions of a penny), literally filling out KYC forms but ultimately felt it felt too risky to wire money overseas to a nascent Chinese crypto exchange.

But then again, my risk aversion / caution in life has probably saved my life from car accidents or overdose so ehh whatever.

NotYourLawyer4 yıl önce

And you probably would have cashed out at a 10x multiple or whatever, so it’s not like you’d be a zillionaire today anyway.

bink4 yıl önce

As someone who bought AAPL at $17/share before the ipod was released. This is correct.

JaggerFoo4 yıl önce

Wow, a lot of histrionics in the comments.

Like a wise man once said: "First principles, Clarice: simplicity. Read Marcus Aurelius, Of each particular thing, ask: What is it in itself? What is its nature?"

The article is dealing with a foreign unregulated crypto-exchange and a US regulated stable coin.

helloworld114 yıl önce

Love the Lecter reference...

alangibson4 yıl önce

Why hasn't anyone created a Non Fungible Stablecoin?

Mint NFTs that are pictures of 100 USD notes you have in a safe deposit box. Sell them for 100 USD. Make money by charging for redemptions of the specific notes you own via NFT.

Imnimo4 yıl önce

Out of curiosity, did Binance's recent faux-audit cover USDC reserves?

aftbit4 yıl önce

A few thoughts from someone who has been around crypto for years:

1. Do not trust any centralized exchange. Hold your own tokens using a secure hardware wallet. Back up your seed phrase securely. This is not really that hard anymore IMO.

2. Let me repeat that, but more emphatically... Centralized exchanges are not to be trusted. They are not "crypto". They are unregulated banks operated by shady characters. Use them as on- and off-ramps from fiat, but get your tokens into a cold wallet ASAP. If you leave your money in them, they _will_ rug-pull you at some point.

3. Crypto token prices are primarily driven by speculation. Do not expect stability. Do not expect a token's price to appreciate just because the project is technically interesting, or solving a real need. Instead, expect prices to fluctuate wildly, mostly in correlation to the same macroeconomic events that impact stocks, with an even higher risk.

4. Not all stablecoins are created equally. Run away from algorithmic stablecoins IMO. Also avoid USDT and any other coins where proof of reserves seem suspicious. I personally prefer USDC. If you _must_ invest in an algo coin, look at DAI, but keep in mind that it is very exposed to USDC as well.

5. USD-pegged stablecoins can all be blacklisted and paused. If they want to do business in dollars, their makers have to accept some degree of US.gov regulation. Do not expect to hold and spend your USDC if the US government wants to stop you.

6. Do your own research, damnit. This is still early days for DeFi and digital assets, and scams are thick on the ground. Do not trust what random internet commentators say, and keep your wits about you.

7. Don't lose hope. While 95% of the economic activity in the space is either scams, fraud, or speculation, the remaining 5% consists of people trying to solve real problems that are not adequately addressed by offline cash and existing payment networks. I know HN loves to point out that crypto is a solution looking for a problem, but the truth is that the current system is not perfect, and crypto brings some much needed transparency and decentralization to the world. Crypto winter is in some ways good for this, as it will disproportionately drive away the scammers and "number go up" crowd, while the real teams will keep building.

Edit, for some specifics of my stack: I use a Ledger Nano X hardware wallet, with Ledger Live for management, Electrum (for Bitcoin), Keplr (for Cosmos ecosystem), and MetaMask (for Ethereum and other Solidity networks). I have a separate Chrome profile that has the latter two extensions installed, and only use it for DeFi crypto things. The only CeFi exchange I use is Coinbase, and I keep my balance there near $0 unless I anticipate a trade within the next 30 days. None of this is financial advice; I'm just a dude on the internet.

ww5204 yıl önce

Are people withdrawing the USDC coins or the USD behind the coins?

22c4 yıl önce

These seem to be the most relevant tweets:

https://twitter.com/cz_binance/status/1602579499903852544

https://twitter.com/binance/status/1602708590271385600

I'm not sure why USDC withdrawals were paused rather than trades on USDP/USDC and BUSD/USDC pairs temporarily disabled. I assume there were trade-offs or technical reasons why it was done this way.

4pkjai4 yıl önce

The crypto coins. Binance is a Crypto to Crypto exchange. You can't deposit or withdraw USD from Binance.

tromp4 yıl önce

These Binance web-pages suggests otherwise:

[1] https://www.binance.com/en/support/faq/how-to-buy-cryptos-wi...

[2] https://www.binance.com/en/fiat/deposit

4pkjai4 yıl önce

My mistake!

schemescape4 yıl önce

Any idea why a New York bank is relevant then (per CZ)?

jqpabc1234 yıl önce

Probably because the USDC is being held in a real bank account controlled by some unknown 3rd party who lives in some country without an extradition treaty.

Gives you a warm, fuzzy, secure feeling that everything is perfectly safe doesn't it?

twelve404 yıl önce

how can USDC be held in a real bank account? doesnt make sense

jqpabc1234 yıl önce

No, it doesn't --- unless they redeem them for USD.

I doubt there is anything preventing Binance from doing whatever they want with the coins you place in their possession.

flamemyst4 yıl önce

The backing of USDC held in real bank account. They need to move real USD to Circle bank to mint USDC.

stevehawk4 yıl önce

is it relevant? or is it a red herring.

mypastself4 yıl önce

I assumed people were moving USDC to other wallets (most likely other exchanges). But now that you mention it, I’m not so sure. Because one could signify mistrust in the token, the other in the exchange.

jqpabc1234 yıl önce

Either way, it's money leaving the exchange. This is what the "halt" is attempting to address if I read it correctly.

The "dark side" of crypto is being made painfully obvious for all to see.

aaroninsf4 yıl önce

I suppose that tiny amount of gifted top-shelf crypto I have parked, underwater, in Coinbase for the last N years is going to just evaporate, isn't it.

bb884 yıl önce

USDC is supposed to be the good stablecoin.

yokem554 yıl önce

This is a Binance problem, not a USDC problem. Now if Coinbase were to not honor USDC withdrawals or swaps to normal USD, it would be fair to say somwthing is wrong with USDC, but that is not the case here.

birracerveza4 yıl önce

If you give me 100 USDC and I pinky promise to give them back but then I don't, whose fault is it? USDC's?

josefx4 yıl önce

They are one of the exchanges prominently listed by Circle as part of its ecosystem. Of course the fine print says that they don't endorse any of the companies they list, but what does it say about the ecosystem if they can't even list one trustworthy partner and instead list groups they explicitly don't trust themselves?

Honest coin salesman: Look you want to trade honest coins? Down that alley is seedy Joe he is one of the local traders, on a good day there is only a 50% chance that he will mug you.

oneoff7864 yıl önce

Really it depends on why you didn’t / couldn’t.

Yiin4 yıl önce

It doesn't, if I give exchange a coin, no matter it's relative value fluctuations to other assets I should still be able to withdraw the same coin back.

oneoff7864 yıl önce

What if they are stolen from you

modeless4 yıl önce

Maybe that's why they can't print it out of thin air...

NotYourLawyer4 yıl önce

SBF was supposed to be the good guy. FTX was supposed to be the good exchange.

It’s crypto. It’s made of lies.

AustinDev4 yıl önce

Lucky me, I just sold all my USDC yesterday. Back into old dollars for me for the time being.

mikl4 yıl önce

A bit ironic that they call them “stablecoins” when they keep falling over.

pabber4 yıl önce

I know where the bailout to cover those withdrawals came from

Animats4 yıl önce

It's 1220 PST. Are withdrawals still frozen?

Animats4 yıl önce

Coindesk says that USDC withdrawals have resumed.

dwighttk4 yıl önce

How’s Coinbase holding up?

latchkey4 yıl önce

Looks at the status page, seems green.

https://status.coinbase.com/

Macha4 yıl önce

Boom.

shadycuz4 yıl önce

Looking forward to the Matt Levine break down in his daily news letter. Only way I can understand most of these finance things.

tnel774 yıl önce

“Crypto sucks. This is proof.”

Exchanges going under proves that people are greedy and/or stupid, but it doesn’t inherently mean every crypto project is bad. It doesn’t seem like people holding their own keys are having a bad time right now. Sure, prices of these assets are down, but a hardware wallet is an easy way to make sure your assets don’t end up being given away during a bankruptcy proceeding.

JumpCrisscross4 yıl önce

> doesn’t inherently mean every crypto project is bad

No, but it’s lost the benefit of doubt.

Starting from the position that crypto is likely fraud, and those participating in it are facilitating (wittingly or not) money laundering, is spreading from financial peripheries to money centre economies.

jbverschoor4 yıl önce

You mean the benefit of the greed

anon2914 yıl önce

> doesn’t seem like people holding their own keys are having a bad time right now

Considering that, instead of owning productive assets that make society better as a whole and provide real value to people, they own tokens that so far do nothing and are only useful due to the exchanges, then yes... that's a pretty bad time.

tnel774 yıl önce

There’s no denying that people “hodling” projects like “DickCoin” are probably having a bad time. I’d suspect that people who invested in more sound projects (Bitcoin and Ethereum, for example) might do just fine in a few years.

anon2914 yıl önce

Ethereum has a potential use case for being productive (useful for ownership of digital assets). Bitcoin... that's difficult to see why it would be used.

tnel774 yıl önce

It seems like Bitcoin’s low rate of inflation and Lightning Network could make it a decent store of value and means of payment, but we will see if that actually happens.

[deleted]4 yıl önce

echelon4 yıl önce

After all of this fallout, the only people left that will even touch crypto will be the ones that understand how to set up and use a hardware wallet.

I don't think that will be a very large market.

tnel774 yıl önce

Perhaps. I’m guessing that the sting will wear off and newcomers will venture into crypto sometime in the future. I personally view these crashes as a necessary cleansing since so many scam/meme projects get created every go around.

echelon4 yıl önce

That's true. But there's a lot of opportunity cost and risk in staying the course, especially if you're a crypto developer or deeply invested.

Governments are modernizing trade and settlement systems. Other areas of tech are booming, and one could conceivably still get in at the ground floor. And who knows, we may have yet to even see the bottom of where crypto will drop.

If I were in crypto, I'd be looking at AI/ML with hungry eyes.

FrameworkFred4 yıl önce

I agree. I don't think paper money is a bad idea because some countries finance their operations by printing as much as they need.

I do suspect that blockchain's killer app may not be tradeable securities, or rights, but something more mundane like Walmart's inventory reconciliation system.