[HN Gopher] Binance has lost $12B in assets in under 60 days
___________________________________________________________________
Binance has lost $12B in assets in under 60 days
Author : surume
Score : 59 points
Date : 2023-01-09 14:05 UTC (8 hours ago)
(HTM) web link (ripue.com)
(TXT) w3m dump (ripue.com)
| mouzogu wrote:
| "In less than two months, nearly a quarter of Binance's assets
| have left the exchange."
|
| note sure if the irony was intentional or not - but made me
| laugh.
| satvikpendem wrote:
| What is the irony? I seem to be missing it.
| ShivShankaran wrote:
| [dead]
| roundandround wrote:
| Orwellian doublespeak of an Exchange that goes broke when
| everyone uses it like an Exchange instead of a Broker or
| Bank?
|
| Perhaps there's a commodities market or something that
| requires traders to pump assets into accounts that sit on the
| exchange itself and would somehow have direct fluidity
| problems if they stopped, but it seems like the wrong term to
| me.
| LatteLazy wrote:
| It lost nothing. It held those assets in good faith and returned
| them when asked. It never owned them. And the assets still exist.
|
| Clickbait bullshit.
| axus wrote:
| E-trade has lost $10B in assets in under 20 days
| indigodaddy wrote:
| Why are customer deposited considered "assets" ? Is the money in
| my checking account included in the assets for my bank?
| perfecthjrjth wrote:
| Customer deposits are liabilities for the bank.
| ShivShankaran wrote:
| [dead]
| unmole wrote:
| Cash that you deposit in a bank becomes the bank's asset. The
| money in your checking account is included in the bank's
| liabilities.
| hestefisk wrote:
| No, cash deposited is a liability for banks. Bank loans are
| assets. It's a reverse balance sheet compared to non bank
| companies.
| jimjimjim wrote:
| well, from the old double entry bookkeeping days: A deposit
| received by a company is recorded as both an asset and a
| liability of the same value.
|
| The assets are then used to create revenue and anything that
| has to be paid to the depositor are expenses.
|
| When the deposit is withdrawn, the asset and the liability both
| decrease.
| michael1999 wrote:
| Yes. That is the heart of banking regulation.
| c7b wrote:
| Customer deposits are liabilities, but if the exchange acts as
| one would expect, each $ of liabilities has a corresponding $
| of assets (ideally, in a segregated account, so that they're
| not considered the company's asset in the case of a default).
| But one may always doubt whether things are as they should,
| afaik Binance has never had a full audit report (not just
| proof-of-reserves or similar).
|
| Banks work a bit differently, btw, they should also have more $
| assets than liabilities, but there's generally no direct 1:1
| link as described above.
| boring_twenties wrote:
| Yes it is
| codehalo wrote:
| Those assets are not Binance's to "lose".
| mouse_ wrote:
| Every central bank, incl. Wells Fargo, Bank of America,
| Citigroup etc. utilizes fractional reserve.
| SPORTSCRYPO wrote:
| [dead]
| dingusdew wrote:
| Considering cryptocurrency seemed to originally be a rejection of
| the traditional banking system, wherein you put your savings in
| someone else's hands, and instead having your own secured
| "wallet" that is always securely in your own hands... it always
| confuses me a little bit at how quickly the crypto space lunged
| headlong into essentially recreating banks and once again having
| large numbers of people put their savings in someone else's hands
| instead of having personal control over their finance.
|
| Are hardware wallets that difficult and/or expensive? Or am I
| missing something that crypto exchanges offer that I am
| fundamentally misunderstanding? Because it seems like this keeps
| happening with these exchanges and that these were the kind of
| things crypto was supposed to be preventing, not doing.
| johnny22 wrote:
| most people weren't in it for the cryptocurrency, but the
| ability to convert it back and forth to actual
| dollars/euros/whatever. The cryptocurrency itself was just a
| means, not an end.
| seydor wrote:
| most people were trading coins for other coins so it was
| pretty much an end. The exchange itself was the means
| justapassenger wrote:
| On top of difficulty, hardware wallets and lack of centralized
| exchanges is undesired for majority of the crypto players.
|
| Why? Because, no matter how you spin it, crypto of last few
| years is get rich scheme. And having centralized entities
| enable all form of fraud - from super basic ones, like FTX just
| openly stealing people's funds, through market manipulations
| all the way to more subtle and complex forms of scam.
| horsawlarway wrote:
| Having been in this space since back when a bitcoin was a
| fraction of a dollar...
|
| "Rejection of the traditional banking system" was mostly a
| symptom of "Doing things the traditional system would label
| 'illegal'".
|
| In which case the upsides of crypto are clear - You can pass
| money around online without regulation.
|
| And the downsides are _WELL_ understood - the "system" does
| not have your back if/when things go wrong. Just like most
| black market trades.
|
| The problem happened when the "finance" crowd started seeing
| bitcoin's value increase at a large rate (and particularly how
| little media coverage was needed to temporarily spike the
| value), and essentially turned the entire thing into a ponzi
| scheme.
|
| They weren't interested in using it as anything other than a
| pump and dump investment vehicle, and its lack of regulation
| was a magnet for the worst sort of folks.
|
| As a tool for online dark exchanges, or other government
| forbidden actives (ex: fleeing the country with ill-gotten
| gains, or holding businesses hostage with malware) - there is a
| small niche for digital currency. I'm pretty well convinced
| there is NO other use case where your national currency does
| not serve as a better alternative.
|
| Even the semi-plausible use cases (ex: preserve value during
| times of high inflation) have proven to be utterly meaningless
| if you're holding US dollars, and the vast majority of cases
| you would be better holding onto shiny metal instead.
| okokwhatever wrote:
| Oh my God. This guys again...
| bartvk wrote:
| This comment feels like it's generated.
| stouset wrote:
| > Are hardware wallets that difficult and/or expensive?
|
| The entire thing is obscenely difficult and completely
| inscrutable for the average human. The number of ways a naive
| participant can lose their entire balance is staggering. Even
| the notion of a hardware wallet is something that 90%+ of
| people holding cryptocurrencies will either never hear about,
| never understand, or never opt to use due to actual or
| perceived complexity.
|
| The average person is simply not qualified to hold onto
| substantial (to themselves) amounts of cryptocurrencies in any
| form. And as it turns out, all of the available evidence seems
| to indicate that most exchanges aren't qualified to do so
| either.
| otikik wrote:
| Agree with everything. I will only add that all that
| complexity is there by design. The design wants to get you to
| _feel like you understand it_ without you truly understanding
| it.
| kkielhofner wrote:
| Nailed it.
|
| I'm waiting for the inevitable wave of social media posts,
| etc from all of the people who will lose access to their
| wallets, have them hacked somehow, etc. I'm sure centralized
| exchanges are already being flooded with customer support
| issues from people who don't fully grasp what self-custody is
| and the risk it entails.
|
| Most people aren't qualified or capable to build a fortress
| with medieval-castle or Fort Knox levels of security and
| process for their crypto wallets but that's more equivalent
| than not of what's required to properly secure them and
| maintain access over time.
|
| The general population hasn't experienced "you're completely
| on your own" for nearly anything in at least a couple of
| generations - and for good reason because it's absurd.
| thedaly wrote:
| I gave my brother a Trezor and with approximately $1.5k USD
| worth of bitcoin on it as repayment for money he lent me.
| I'm fairly certain he hasn't touched it and has lost the
| pin/seed.
|
| I think I have his seed written down somewhere, I certainly
| gave him a written copy when I gave him the trezor, but if
| I can't find it his BTC will be lost.
| halkony wrote:
| I'm not super into crypto, but could you theoretically
| brute force a hardware wallet if you had enough computing
| power in the year 20XX?
| Nextgrid wrote:
| There are 2 things you can brute-force:
|
| 1) the seed for the private key - this is infeasible to
| brute-force just like you can't brute-force a private key
| directly
|
| 2) the authentication credential to the hardware wallet -
| the key space is small enough that brute forcing it would
| normally be easy, except the whole purpose of a hardware
| wallet is to limit the amount of attempts.
|
| The former option is infeasible, the latter has a slim
| chance if some vulnerability in the hardware wallet was
| discovered in the future.
| mrguyorama wrote:
| No. Most of these systems use enough "bits" in the key or
| whatever that brute forcing it would basically require
| hiring the entirety of AWS for a hundred years and also
| winning the lottery in terms of luck.
|
| Raw number crunching power of silicon would need to
| double like 5 to 10 times before it's even a thought in
| the NSAs mind, and I am in the camp of that never
| happening. There will never be enough computing power for
| cheap enough to crack a wallet holding $1500 in bitcoin,
| unless quantum computing literally magics up a solution,
| which might never happen, even in theory.
| [deleted]
| danans wrote:
| > The entire thing is obscenely difficult and completely
| inscrutable for the average human.
|
| For a particular kind of perspective (which I don't subscribe
| to), that could almost be seen as a feature rather than a
| bug.
|
| The scenario is the one cryptocurrency has actually replaced
| fiat currencies but the only people who can secure their
| assets are those with the sophistication and power
| (basically, weapons and private armies) to maintain the
| required opsec.
|
| And then we've basically recreated golden treasure hordes and
| the warlords who own them.
| c7b wrote:
| Would be interesting to know the breakdown how many of those
| withdrawals were on-chain versus fiat.
| seydor wrote:
| Binance would be losing 'trust' if they were moving their
| 'assets' from binance to another exchange. this seems to be part
| of the global de-investment though
___________________________________________________________________
(page generated 2023-01-09 23:01 UTC)