Binance banned from doing business in UK
bloomberg.com
bloomberg.com
Keeping anything on an exchange, for the time being, is just too risky. This is another example of it. Governments are still trying to figure out how to regulate crypto, ever shifting the amount of hurdles between crypto and the world of fiat.
I'd advise to pull funds if possible. I've recently done so with mine.
Of course that means my keys / wallets are now my responsibility, along with ensuring that I have appropriate backups in place etc.
So many people pouring money into this space have never seen a bear market or a bank run.
The fact that this parent has a number of children that don't seem to pick up on this is problematic to say the least.
Neither of them have to be. All exchanges take place in pairs; one holding is exchanged for another. Buying BTC with dollars is (USD, BTC); buying Microsoft is (MSFT, USD); buying EUR with dollars is (EUR, USD).
Nothing prevents you from pricing Microsoft stock in BTC or BTC in EUR or Etherium.
The holding as such, however, is only a fiat holding when it is in fact either a (wad of) cash equivalents and/ or a bank balance.
There isn't a person on earth for which there is only two types of relevant holdings, in either USD or BTC. A person that (seriously) considers acquiring a crypto holding, such as BTC, is most likely choosing between other crypto currencies, gold or silver, primarily. Even more likely, they're merely FOMO-speculating as a complement to plain stock holdings.
The fact that a number of you don't seem to understand this should call your competency into question.
But yes, I agree with you about where fiat is used. It's almost always used by people that don't quite undersand the concept of value or that of money for that matter.
Money is not declared valuable by political authority. That is just not how it works. Crypto is what's declared valuable by fiat, ironically. Its value is described as derived in terms of a limited supply (it's just like Gold!)
Fiat currency derives its value from network effects, debts and the feeling of safety (or the lack thereof.)
There is plenty of evidence to the contrary.
If you didn’t cash out already and are taking your coins offline etc, you’re the bag holder.
https://crypto-anonymous-2021.medium.com/the-bit-short-insid...
https://bitfinexed.medium.com/tether-is-setting-a-new-standa...
USDC (the second largest stablecoin), isn't appreciably better.
Binance has its own stablecoin: BUSD
USDC is associated with Coinbase, the exchange that recently went public, so I'd assume it's far more trustworthy than Tether.
As a cryptocurrency exchange, Binance must hold Tether to operate.
As the most popular cryptocurrency exchange on the planet, they're likely to be on the larger end of Tether (and various other cryptocurrencies) holdings.
I'm not defending Binance here, I think there's fair potential that they're doing shady stuff, but they're not responsible, in any way, for the minting of billions of dollars of Tether, or involved in any of the dodgy accounting around Tether's backing.
Same goes for Huobi, who are second on that list. They're an exchange. Holding Tether is an essential part of being in that business.
https://cointelegraph.com/news/a-by-the-minute-look-at-tethe...
BTC is functionally a security. Under any duress of the USD I'd expect it to perform no different than AMZN stock.
If you traded your BTC for some non USD currency the same point remains.
Yeah, sure, but everyone except cranks who works in fiat openly acknowledges that. Fiat (well, major fiat currencies like the dollar) are good for low-volatility liquidity. For long-term accumulation of value, you invest in productive assets, which are both riskier over the long term and higher volatility over the short term, but have higher average long-term yields. And, ideally, you diversify investments in ways that maximize independence of at least long-term variation, to mitigate risk and get closer to consistent long-term average results.
Crypto“currency” that isn’t fiat-pegged tends to be worse than major fiat at the things people who prefer fiat think fiat is for, while (in the best cases) being a very high-volatility speculative asset with very good average performance over its history to date (which isn’t very long term). It’s thus not a great replacement for fiat, but potentially a bice addition to the stable of available investments.
I think you should not ignore the forest for the trees here. A small purchase today held for another 5-10y could prove quite lucrative for you.
Am I supposed to believe crypto nerds aren't holding any fiat?
For some reason people genuinely seem to believe that crypto will only go up, when the reality is that we have no clue.
When every average Joe thinks crypto will make them rich, it's time to dump your bags.
I just hope my parents and relatives aren't secretly stashing away their life long savings in crypto because of all the hullabaloo.
There’s an ad running on Indian TV literally of this script..Two moms are talking, while one brags about her son being in USA, buying cars etc the other’s son is seemingly trading crypto on a mobile app. The other mom then retorts “all that is fine, but have you invested in crypto?”.
It’s crazy, they are drumming up FOMO.
If you are curious and know Hindi: https://youtu.be/KKItA9fDCk4
This is probably a big reason why there are so many "amateur" investors compared to more traditional investments/trading.
My favorite spin on this is computing the present value of buying AMZN instead of whatever I was ordering from Amazon.
If I approached you in 2012 with two envelopes, one with $20 worth of US bank notes, one with $20 worth of Bitcoin, you'd most likely take the cash. If I approach you again in 2021 with the same envelopes (unopened) from 2012, only a fool would take the cash.
Speculative assets would not exist if your theory held water.
If Monty Hall asked you if you wanted to change doors before opening one the problem would not be much of a problem.
If you buy anything at $X with intention of "hodling" it to increase it's value, unless you have a plan (i.e. I will sell at $Y) then you are just holding on to nothing. You will either sell too early or too late (now talking about the absolute maximum gains) and then you will always "feel silly".
Unless OP actually put in, say $300k (a price of a small house) and that was stolen he didn't lose "a house worth of money" since he had no exit plan. I don't play crypto, but I could still say that I lost $600 when the market crashed couple weeks back conveniently forgetting that my initial investment was only $10 back in the day. I could even be more dramatic and say that I lost half of my bitcoins just in the crash and not mention that I only had $1.2k.
I don't think that's holding on to nothing just because there's no exit plan in place.
If I invest 30k in index funds that are managed by my bank, with the expectation that the value will rise and thus beat inflation, i wouldn't say that I'm holding on to nothing.
Similarly, if the value would rise to 35k over time, but something (like an economical crash, or any reason) would have me withdraw my money before that, I think it would be fair to say that my actions made me miss out on the total value of 35k.
I don't see how the case of Bitcoin is that much different - most people won't have sold at its highest point, but the average value has indeed increased bunches compared to when it was not popular.
I don't think you always need an exit strategy for every investment you make - wanting to diversify and perhaps beat the inflation seem like valid goals, regardless of whether you're putting money in index funds, are buying BTC, or are burying pots of gold in your back yard.
Volatility and risks are probably another story, though.
I.e. you would have to not only account for losing $34k but also lose nearer a few hundred thousand because you could have sold at each peak and bought at each trough.
Your loss is 2.5M × market rate at the time of loss.
------
Credit,Debit
$1500,2.5M Doge
2.5M Doge,0
Bankrupt
------
The business lost $1500
When the producers of that podcast weren't sure about something, they said so. When they couldn't get an interview with a key player in the story (such as the wife), they said so.
They require I provide an address tied an account within their "reputable" list of exchanges which ironically includes Binance.
Unless we fight back, the crypto space will quickly devolve into a worse version of banking.
For most people though, I feel like exchanges are safer from the more common threats: viruses, ransomware, failed hard drives, fire, floods, "gimme-your-laptop" gunpoint, ... They ironically also make your crypto slightly more anomymized since you aren't always spending out of the same wallet address so when you transfer crypto to someone, they don't automatically know your crypto net worth.
I wouldn't trust Binance though. I moved all my funds off Binance for one reason -- their UI (especially authentication workflow) is super buggy, and that makes me extremely not confident that their backend isn't equally buggy. To top that, when I tried to report bugs to them they wanted my national ID to even engage in conversation, instead of fixing the bugs. Fuck that. Fix bugs first and only then will I trust you with my ID.
Kraken, Bittrex, Coinbase Pro have solid UIs and give me more confidence in the quality of their engineering.
I wonder if there is an opportunity for smart contracts around insurance for the exchanges...a bit meta...
But if the blockchain supports actually invalidating those coins and transferring them to a new wallet via e.g. 3 trusted friends with pre-pregrammed wallets that sign and verify your new wallet, maybe it could work.
For long term storage, you need indestructible and physically secured backup of your keys. Basically, you just need to write down the 12 or 24 seed words generated by your hardware wallet and try to keep the words safe from destruction and theft. It's recommended to use a indestructible material such as steel for these, and then store or hide them safely. For more advanced security, seed words can be split in multiple parts using the SLIP39 seed format.
For hardware wallets, e.g.:
For long term storage, e.g.:
Why is that in any way more secure than writing down the private key itself? (inb4 "need to find both the hardware and the written seed words" that's equivalent to writing down the private key and then cutting the paper in half)
Hardware wallet is assumed to generate BIP39 seed words securely. If you don't trust the RNG, some hardware wallets also support adding your own entropy with dice rolls. [0]
[0] https://coldcardwallet.com/docs/verifying-dice-roll-math
The point is that you can decide what to do with it... be your own bank. You can also add a password to a seed phrase backup if that makes more sense for your threat model.
Then just keep those details safe.
Too many people I know haven’t instructed their dependents how to access their crypto.
As for if you die … you could use one of those services that will send an email out to your significant others if you don’t log in for X amount of time.
And put your bitcoin private key in there? Surely whoever runs those services would take all your money.
Being your own secure bank isn’t a trivial task. Hopefully this can get easier in the future
You can also have normal software wallets (don't recommend it for larger amounts) or paper wallets.
And if you’re backing up your keys on USB drives, use high-endurance SLC NAND industrial drives. They provide the highest reliability and endurance available.
"There's nothing special about ZFS that requires/encourages the use of ECC RAM more so than any other filesystem. If you use UFS, EXT, NTFS, btrfs, etc without ECC RAM, you are just as much at risk as if you used ZFS without ECC RAM. Actually, ZFS can mitigate this risk to some degree if you enable the unsupported ZFS_DEBUG_MODIFY flag (zfs_flags=0x10). This will checksum the data while at rest in memory, and verify it before writing to disk, thus reducing the window of vulnerability from a memory error.
I would simply say: if you love your data, use ECC RAM. Additionally, use a filesystem that checksums your data, such as ZFS."
https://arstechnica.com/civis/viewtopic.php?f=2&t=1235679&p=...
You stated "Also a good idea to use ECC Memory with the ZFS filesystem".
You should have probably stated its a good idea to use ECC memory, period. Instead you tied ECC to ZFS.
Both are better than either, and either is better than neither. Especially if you're storing cryptocurrencies on it.
A lot of people swear by hardware wallets like Ledger, and I think those are probably the best options for people that don't know a lot about security and crypto or possible even those that do.
Here's the thread: https://www.reddit.com/r/CoinBase/comments/nhug9u/75000_just...
Not to mention that most big companies have kafkesque awful support, but if they offer better for $0.01/year more, all their clients will go elsewhere. Bad support is only noticed when you got bitten and just not that a big % gets bitten, even if support is awful for almost all that needed such support (you need support, the bot chat does not work for you (apparently it works for people) and then you need to have a bad experience).
Because they chose a support platform that makes it very easy for other people to impersonate them? We would laugh at a bank that was running their support out of /~foobank/ on a shared hosting provider, but reddit is pretty much the same thing.
But yes, support via reddit is weird, I agree to that.
A financial firm providing support through reddit, on the other hand, is a bad joke.
If the support would be good, reddit would not be that much of an issue, but yes, you are right that it is at least weird. Probably they think it is all OK in the free-spirited crypto world.
(PS: these are my personal genuine concerns and I’m at least somewhat willing to have my mind changed: not trolling or being argumentative for entertainment)
https://www.theblockcrypto.com/post/109766/uk-fca-bans-crypt...
"Since Binance pulled its application, that means the exchange can no longer provide services that were previously unregistered either, such as spot trading"
It feels like The Block isn't entirely sure what Binance can or can't do at the moment.
I'm sure also Binance and the FCA aren't sure about that. The regulatory uncertainty in this space is huge. Even after this statement it is very unclear if there are any effective sanctions FCA can enforce on Binance if they continue doing whatever they are doing. Or they might just stop advertising, and start some stealth advertising campaigns after an year os so.
A good regulatory step for the US would be to require that it can't be harder to withdraw than to deposit. Any ID requirements have to be completed before depositing, not withdrawing. And all withdrawals must be processed by T+2. Same rules as regular brokers.
Also that t+2 thing is just allowing shenanigans. When Rh forces the industry into instant settlement next year (hope!!) we will see who is truly been playing funny money. Looking at you citadel.
I've never seen this notation before. Does it refer to blocks, hours, or (gasp!) days?
Not paying on time is called a "fail". There are penalties. For US stockbrokers, FINRA enforces them.
In the real world, a broker failing to pay out cash on time to multiple customers is a Big Deal. Alerts come up on Bloomberg terminals. It's headline news. Institutional investors stop sending trades to that broker and start demanding collateral. The SEC, FINRA, NASDAQ, NYSE, the Fed, and other become involved. See the collapse of Bear Sterns.
South Africa for example has very strict capital controls, hence the price to buy or sell Bitcoin is higher than elsewhere. The catch is that you can't easily move fiat out of the South African economy, which makes abritrage, to take advantage of this imbalance, impossible.
The FCA has now placed restrictions on BML which remove its ability to carry out those regulated activities -- however BML was not actually doing any business in the UK so the effect of this is limited.
The FCA also issued a consumer warning which, among other other things, reiterated that no entities in the Binance group are registered with the FCA and therefore cannot carry out regulated activity in the UK. Again, the impact of this is limited since the entity that you interact with when using the Binance.com website is not based in the UK, and the FCA does not have jurisdiction over it.
A possibly outcome is that Binance will be a bit more circumspect about offering derivatives trading to UK retail because they want to build a more substantial UK business in the future. We saw this with Bybit a while ago, where they do not allow UK retail to use their website (although they have an exception for sophisticated investors, who can self-certify as an eligible counterparty and continue to trade on Bybit). I wouldn't be surprised to see this.
The spokesperson clarified that "UK consumers can continue to interact" with Binance Group, the wider, international collection of Binance companies that maintains no official headquarters. That means that Binance's customers in the UK can trade on Binance as normal—nothing changes."
I can easily partition bitcoin's good qualities from all of the bad things that people do with/for them. But I don't think most people will do that. At the same time, in some ways it's nearly indestructible. So even if it's unpopular it will at the very least continue to serve the black market.
This is the traceability I mean - there is a reason that ransomware uses bitcoin rather than a PayPal account even though the transactions are in the ledger (because the transaction can't be cancelled, and even logging into the PayPal account could result in your physical location being traced unless you are very careful).
I assume the US government will ask Coinbase to freeze these assets. But that is not DeFi.
https://en.m.wikipedia.org/wiki/The_purpose_of_a_system_is_w...
This would be a corrective feedback mechanism which steadily makes the social configuration less exploitive, and I think one could reasonably assume it is a far less failure-prone feedback mechanism than periodic political elections.
Beyond the theoretical arguments, the empirical evidence suggests this is what happens. For example, countries with lower levels of government spending as a percentage of GDP have on average higher rates of economic development. For a more relevant example, the quality of project needed for a token sale to be successful massively rose between 2015, when the first token sale was announced, and late 2017, when the SEC shut down token sales. The market was evolving, while massively expanding the number of people participating in early-stage investing: https://link.springer.com/article/10.1007/s11408-020-00366-0
>"The average ICO has almost 4700 contributors. The median contributor invests a relatively small amount. The ICO market appears to have successfully given access to the financing of innovation to a new class of investors, which is a long-standing public policy issue"
Any citation for that?
https://old.reddit.com/r/CryptoCurrency/comments/o80yxs/bina...
https://www.binance.com/en/support/announcement/ba03469c86f3...
From the FCA's website[0]:
> While we don’t regulate cryptoassets like Bitcoin or Ether, we do regulate certain cryptoasset derivatives (such as futures contracts, contracts for difference and options), as well as those cryptoassets we would consider ‘securities’ – find out more information. A firm must be authorised by us to advertise or sell these products in the UK
[0] https://www.fca.org.uk/news/news-stories/consumer-warning-bi...
"Binance is being probed by several agencies in the U.S., Bloomberg News reported in recent months. And Japan’s Financial Services Agency issued a warning against Binance recently, saying it offered crypto services without registration."
https://www.financemagnates.com/cryptocurrency/news/japans-f...
For non-significant amounts that you want to be able to use in the go, you can choose to additionally have a hot wallet (others have already mentioned MetaMask for ETH-based, for example).
If you do not want to go the extra mile and want convenience, and have an iPhone, personally I think an iOS-based wallet is a more secure choice than having it on your desktop or Android device.
Save your BIP39 seed phrase offline (paper for example). Protect it with a pass phrase. If you want extra protection on the passphrase, there are solutions to “split” it using Shamir’s scheme to for example 2-out-of-3 and store the parts on different locations. (Definitely run this on an offline device, for example on a laptop booted from a live USB key)
Either way I advise against fully custodial wallets such as blockchain.com or crypto.com (commonsly recommended but not your keys not your coins).
With both, make sure to save the generated seed phrases, and use a strong password to lock the wallets.
I like crypto. I like defacto drug decriminalisation and sanctions busting. But it was never gonna make it past AML.
Maybe the ones who have something shady going on are just the noisiest?
Its not simply a matter of “bought low, sold high”.
You get the same thing in most exchanges: a few percent of users are 80% of revenue. And that's true even when there is no "secondary market" which can only make it worse.
The technology will float around, but the actual formal legal exchange of fiat for crypto should be banned.
This will indirectly disable Ransomware, since businesses will not be able to purchase the coins.
And by reducing the price of coins, reduce the waste (electricity, hardware, human effort) associated with 'mining' them.
Moreover, your predictions seem completely bombastic to me. Has there ever been a case where governments banned something and the resulting black market settled at a cheaper equilibrium? I can't think of one.
I'm guessing the laws and cultural norms around how you acquire your money (monopoly, disclosure, insider trading, kickbacks) or pay tax (or game the system to avoid it) have much more to do with inequities in society, and that financial manipulation is far more rampant in the private sector than the public. The rabid anti-government messaging is not one I can relate to.
Regulation appears to be simultaneously lacking in scope and under-enforced. And it's the role of the Government do make sure that regulation is both appropriate and enforced.
Without appropriate regulation and enforcement, the government is the facilitator to the finance industry's villainy. For the people.
Crypto is full of pump and dump and exit scams.
Bitcoin et al are also algorithmically supply inelastic. As demand for the coins decreases (due to the inability to actually buy them), the price will decline. This is basic supply and demand economics.
Tell that to my friend who had his family's fortune wiped out in Argentina twice due to government seizure and hyperinflation before fleeing the country. Are these people just supposed to just take it on the chin for generations until their governments/societies stabilize?
I don't know how anyone can see no value in a medium of exchange outside of government currency controls.
Crypto is opt-in.
If you think it's a pump and dump, then just don't participate. Stop forcing people to do what you want, stop banning things you don't like. Leave me alone.
Electricity shortages haven't been caused by crypto, and neither is crypto the cause of widespread ransomware. It may be the currency in which ransoms are desired to be paid, but to say they're the cause is misleading.
You could well argue that the fact currency for which payment is demanded is proof of its use-case as a currency / transfer of value. Criminals and the porn industry are always the canaries in the coal mine for "new". That criminals are increasingly using it is evidence of it's success as opposed to evidence of its imminent demise.
Is this still relevant in the information age?
I care a lot about my communities, and I don't think that, from my position of privilege, I can justify going around and telling people, "just vote - the violence against you will stop eventually."
I'm not saying crypto is a complete answer either, but I think that its status as a change agent outside the political process is something to be celebrated, not condemned.
That's putting aside all the generations, centuries and millenia of lessons learned that are enshrined in how a government-run state runs. It's hard to guess what alternative you're even imagining, but do you think some anarcho-crypto-decentralized-eco-intentional-autarkic commune where all internal "violence" has been eradicated can live in a bubble detached from the rest of the world?
What is your workable alternative to the state?
I do notice that, at this moment in history (but I grant, not at all moments) the political processes (tactics like voting, lawsuits, etc) seem to produce changes that concentrate privilege. And I also notice that change agency outside the political processes seems to be much more humane. Crypto is just one example of this; mutual aid in the broader sense remains an example.
I've gone back-and-forth on this in my lifetime (including the 5-year period of formal study for my polysci degree), but from where I stand now, I don't think that the marginal safety conferred by sticking to the political processes alone is worth the sacrifice to our suffering friends and neighbors.
It's 2021, and we still have two million people in prison, six million in various phases of the carceral system, wars for profit around the globe, and a currency controlled exclusively by the already-wealthy for their own purposes (which, by the way, I don't think are actually served in this configuration either).
So yeah, I think let's start to build things to allow the state to be relieved so that we can take care of each other.
Power goes both ways. States created more prosperity and misery than anything else.
Citation needed? America had more economic growth in the 1800s when the state was much smaller. The large states in communist Russia and China held their economic back decades compared to western countries with smaller states.
The opposite is pretty much happening, regulation. So government is licensing the exchanges and after that the licenced exchanges will have much better foothold in their business as the unlicenced exchanges get kicked out. In the long run for the legit users of crypto this will be for the better.