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Comment by pavlov | Hacker News Reader

Why does anyone trust Binance either? They’re notoriously shady about where they operate and what assets they actually hold, to the point that they’re officially not headquartered anywhere.

If you have $100k at Binance, is there any reason to believe you could withdraw it tomorrow? Any contract you may have with Binance is made with a local shell company that could just as well be a hot dog stand. Any money you’ve sent them is effectively nowhere.

FTX was supposed to be above the board and they collapsed in a day. A few months ago FTX was the white knight buying out distressed crypto companies. Why would Binance do any better?

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Why did anyone trust FTX either? The trust was really based on the credibility of the person running it, and the fact they had bailed out some other failing exchanges. But there were no hard facts.

In fact it seemed like all it took was a public quarrel with the founder of another exchange to start the ball rolling toward total collapse -- again, because it was all based on personal credibility.

It's almost as if crypto tokens are intrinsically worthless!

Though that's not really the issue here. Obviously they were worth something to the people buying and selling them.

Crypto is worth something in that it can be sold at a higher price. USD is worth something in that at the point where it isn't you already have much bigger problems

Not really.

If I buy and sell a coin from myself with monopoly money for ever increasing prices - is it really worth anything?

Obviously there are some inflows into crypto. But it's about 0.00001% of the daily volume.

Yeah but that's not the situation. If you have a bitcoin you can sell it to another person for several thousand real US dollars. Even if you hate crypto it has that value to it. I mean re "about 0.00001%" I've bought and sold bitcoin myself and usually for actual money.

True there isn't much intrinsic value to the 0s and 1s making up a bitcoin but there aren't much to the the 0s and 1s making up the US$ or similar in your bank account.

They’re worth something today because people want them today. If they don’t have any real-world yield, that doesn’t make them worth anything tomorrow. As FTT just demonstrated, like so many have before.

Wait til you hear about how fiat works.

You can think that crypto is absolutely worthless. But then an exchange is like a casino, earning fees on other people's gambling. There's no reason for the casino to go bankrupt, unless...there's fraud going on.

> the fact they had bailed out some other failing exchanges

That happened after they were buying stadiums and had a Larry David spot on the superbowl. They were the archetypal dumb money, top of the bubble, company. No one should be surprised they couldn’t handle a financial stress test. Sam was great at PR and maybe not much else?

This year this guy has been on every major podcast being touted as a genius philanthropist / “good” capitalist. Remember he just crashed TWO companies. Alameda and FTX. The bubble keeps popping. I’m curious who’s next. This almost certainly will ripple beyond crypto to general tech companies given how.. all the top VCs have billion dollar funds in crypto as my “exhibit A”

They slowly built/clean their reputation, bitcoin going up to 70k made everyone just forget the past.

But yeah, they are probally the most shady ones, but the fact they actually have no offices and no govs after them, makes it easier to hide your operations, its the same for tether that has managed to get so big with absolutely no offices, no employees or anything.

Both are best friends.

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