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Comment by nailer | Hacker News Reader

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nailer

> They are not a custody service, they are an exchange.

Interesting. Because a lot of people think they're a custody service and use Binance as such.

> They are not obliged to hold USDC, if all customers have their assets in BUSD due to the conversions that happened.

What? Someone trusted Binance to store USDC. The conversions should not have happened.

> Are you expecting Binance to have 1:1 BUSD on hand, in addition to holding the same amount in USDC as well

No. Nobody is expecting that. You're the only person that mentioned it.

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> Interesting. Because a lot of people think they're an exchange and use BInance as such.

...that's what I said?

> What? Someone trusted Binance to store USDC. The conversions should not have happened.

Conversions were announced timely. See https://www.binance.com/en/support/faq/what-is-busd-auto-con...

> No. Nobody is expecting that. You're the only person that mentioned it.

Its the logical conclusion of people expecting Binance to hold full USDC deposit amounts, even when most/all USDC was converted to BUSD.

Sorry I typed too quickly. People can and do expect Binance to be /custodians/.

> Conversions were announced timely.

Yes. Without consent of customers, or even any confirmation from customers that they'd read of and were aware of their coins being swapped for a different currency backed by a different organisation.

> Its the logical conclusion of people expecting Binance to hold full USDC deposit amounts

No. The logical conclusion of people expecting Binance to hold full USDC deposit amounts is a 1:1 USDC holding, not to have a second BUSD copy of every coin. This is a bizarre straw man.

I guess we'll have to agree to disagree then. If customers didn't want their USDC deposits converted, they shouldn't have used Binance. Its not a public service company. Same goes for your expectations of custody, they never claimed to be one.

Conversions are even announced when you go to deposit USDC:

"Please note that your USDC Deposit will be auto-converted to BUSD at a 1:1 Ratio. Please refer to announcement details. https://www.binance.com/en/support/announcement/e62f703604a9..."

I don't see how your point holds, besides "customer expected X, but got Y" - but this is because customer is misinformed, not because Binance has an obligation to store USDC 1:1 (in this case).

Nobody said Binance was a public service company. This is another bizarre straw man.

> never claimed to be one.

Binance say they are a custodian on their own website.

> customer expected X, but got Y

Yes. Misleading people for financial gain is fraud.

> this is because customer is misinformed

No customer holding USDC in Binance knew their funds would be replaced before Binance replaced their funds.

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