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Comment by ww520 | Hacker News Reader

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ww520·

Are people withdrawing the USDC coins or the USD behind the coins?

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These seem to be the most relevant tweets:

https://twitter.com/cz_binance/status/1602579499903852544

https://twitter.com/binance/status/1602708590271385600

I'm not sure why USDC withdrawals were paused rather than trades on USDP/USDC and BUSD/USDC pairs temporarily disabled. I assume there were trade-offs or technical reasons why it was done this way.

The crypto coins. Binance is a Crypto to Crypto exchange. You can't deposit or withdraw USD from Binance.

These Binance web-pages suggests otherwise:

[1] https://www.binance.com/en/support/faq/how-to-buy-cryptos-wi...

[2] https://www.binance.com/en/fiat/deposit

My mistake!

Any idea why a New York bank is relevant then (per CZ)?

Probably because the USDC is being held in a real bank account controlled by some unknown 3rd party who lives in some country without an extradition treaty.

Gives you a warm, fuzzy, secure feeling that everything is perfectly safe doesn't it?

how can USDC be held in a real bank account? doesnt make sense

No, it doesn't --- unless they redeem them for USD.

I doubt there is anything preventing Binance from doing whatever they want with the coins you place in their possession.

The backing of USDC held in real bank account. They need to move real USD to Circle bank to mint USDC.

is it relevant? or is it a red herring.

I assumed people were moving USDC to other wallets (most likely other exchanges). But now that you mention it, I’m not so sure. Because one could signify mistrust in the token, the other in the exchange.

Either way, it's money leaving the exchange. This is what the "halt" is attempting to address if I read it correctly.

The "dark side" of crypto is being made painfully obvious for all to see.

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