Single point of failure owning close to $1.7 quadrillion in public securities | Hacker News Reader

Single point of failure owning close to $1.7 quadrillion in public securities

3 pointsstevenjgarner5 comments

The Depository Trust & Clearing Corporation (DTCC) - https://www.dtcc.com/ - is the entity that owns in trust securities that are purchased "on account" on behalf of trading customers, making it by far the highest financial value processor in the world. The DTCC settles the vast majority of US securities transactions, close to $1.7 quadrillion ($1,700,000,000,000,000) worldwide - https://en.wikipedia.org/wiki/Depository_Trust_%26_Clearing_Corporation

Similarly, Cede and Company, a New York City-based partnership of certain employees of DTCC, technically owns substantially all of the publicly issued stock in the United States. Thus, investors do not themselves hold direct property rights in stock, but rather have contractual rights that are part of a chain of contractual rights involving Cede - https://en.wikipedia.org/wiki/Cede_and_Company

How is it a point of failure?

It's not like somebody can steal the shares.

Crypto crowd is seeing points of failure everywhere, mainly to justify to themselves and to others the idea of holding cryptocurrencies.

It's total madness, you don't need to justify anything, it's 2022, it's totally acceptable to own an asset just because other people also want to own it and many more will want to own it (thus making the price increase).

It's also totally acceptable to own something because you are seeing something in the supply and demand of that asset which implies a future run up.

Again it's 2022, come out of the closet already, people like Soros and Druckenmiller have been doing this since the 80s and they never felt the need to justify themselves.

Well for one, isn't naked short selling a single point of failure where rights entitled to shareholder literally are stolen? As a holder of public securities what transparency mechanism exists to ensure my securities are not subject to naked short selling?

"Cede & Co - The $54.2 Trillion Shadow Trust That Owns The World" - https://www.youtube.com/watch?v=A-Uk0C8W2M0

See also https://news.ycombinator.com/item?id=25955509

Blockchain currencies are by definition secure, decentralized, open, transparent, and trusted yet crypto is often criticized for their crypto exchanges being centralized single points of failure that can (and do) get hacked. In much the same way, the DTCC is a single point of failure that invites bad actors to attempt illegal naked short selling and other nefarious actions. IMHO the DTCC should be replaced with a smart contract.

Reply on news.ycombinator.com