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Comment by Klathmon | Hacker News Reader

There is a very vocal minority of the cryptocurrency space that are against any companies that do follow the regulations.

There are thousands that are boycotting Coinbase because their KYC systems take too long, or their deposits/widthdraw take 2 weeks sometimes. Just today I was reading a thread on Reddit where someone was claiming to be currently sueing Coinbase because their account was closed due to them depositing from a bank account that didn't match the name on the coinbase account...

Or people don't use them because the fees are marginally higher.

I just don't get it. If I'm going to put my money somewhere, I want the place to be following every US law, and charge enough fees that I'm not worried they will go bankrupt or resort to shady tactics to make money.

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Yeah it'll be interesting to see how this all shakes out.

I used to be pretty Randian/anti-regs but I now see that places like this need to operate under some level of regulation to ensure they aren't massive conduits for money laundering, and are subject to basic rule of law (e.g. following court orders).

The real question is the extent to which people see operating outside the law as a good thing. Sure, it may be cheaper in the short run, but in the long term, having recourse to courts, police, and other standard norms of civilized society might be worth more than people realize.

I don't equate Randian with "anti-reg".

Rand speaks of an ethos of personal accountability versus one that hides their crimes behind a facade of claimed social norms. It's not an issue of private business vs public regulation other than the sort of people each group tends to attract.

Rule of law is pretty important to having a fluid economy. I've looking into starting businesses in parts of the world with fewer regulations - hard-to-attain power becomes the defacto currency in those economies. In crypto, the corollaries are Tether-like frauds and electricity-theft driven mining pools.

I'm not even talking about KYC or US law or anything else. If you want that, there's Gemini and Coinbase.

I say, fine - run it anonymously from Hong Kong for all I care, just be transparent about assets and liabilities so everyone can see that you're solvent.

If someone did this, wouldn't they quickly take the lion's share of volume away from the sketchy exchanges?

If you don't follow US laws, you'd better not be taking any US currency, because you will get your shit shut down, and any US funds sent there most likely frozen at some point.

Ultimately, because large traders care more about short term liquidity than long term solvency.

Are liquidity and solvency mutually exclusive?

They seem symbiotic to me (exclusively mutual?).

Its a space where millions are raised on nothing more than a whitepaper, probably a bit idealistic to expect rational actors.

Bitfinex has been undergoing third party audit from Friedman for months now. No one cares though and still throw accusations around like confetti.

Anyone who knows this fact and doesnt trust Friedman as a multinational auditor/accountant should say as such, rather than repeating blatant falsehoods.

It quite easy to see what others have to gain from the negative coverage.

Exchanges ddos each other all the time, its a shady industry, 15mins downtime for poloniex can double the weekly income of small exchanges.

I'd hope hn readers see between the lines a bit more rather then jump on bandwagons.

https://www.bitfinex.com/posts/202

http://www.friedmanllp.com

Have we experienced high-profile auditors, accountants and other "independent third parties" in the financial industry lying, prevaricating, or even acting in bad faith in recent memory?

http://www.mcclatchydc.com/news/politics-government/article2...

http://www.chicagotribune.com/news/chi-0209010315sep01-story...

Undoubtedely, I'm not going into bat for the financial industry here, but essentially it comes down to the delegation of trust that is required with many transactions, financial or not

> Bitfinex has been undergoing third party audit from Friedman for months now.

Is there proof of this? All I've seen (and I may be ignorant of the rest, so this is a legitimate request :) ) is that "note" from Friedman LLP that explicitly stated it was not an audit.

When stating easily verifiable information about the cryptocurrency industry the proof/sources request as some form of rebuttal seems to be a very common respone, always find it intruiging that many either don't want to search themselves or perhaps simply want to use it as a way to discredit a comment.

3rd result from googling "friedman bitfinex":

http://www.friedmanllp.com/insights/auditor-engagement

Now you said Friedman "explicitly stated it was not an audit", I searched and all i can find is blog posts and reddit threads. Any chance you could procure this explicit statement? Thanks.

The url I provided says the compete opposite and itself links to the original source I offered.

But what does Coinbase has to do when people do stuff like this:

http://fortune.com/2017/03/19/irs-bitcoin-lawsuit/

Though the claim was lowered to 20k:

http://fortune.com/2017/07/10/bitcoin-irs-coinbase/

But with BTC prices increasing even this might prove troubling and net more than 14k customers which coinbase reported earlier: https://blog.coinbase.com/coinbase-irs-update-ed9c966c7747

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