Coinbase halts operations in Japan

The timing of great profit and loss for coinbase strongly suggest that they hold long crypto positions on their balance sheet.

I'm left wondering how they managed to lose that much?

Only one, FTX? The rest have AFAIK been treated with (well-deserved given events) at the very least suspicion and FUD.

I don’t know if many major exchanges that stole customer funds. FTX is the only one I can think of. MtGox was a hack followed by a coverup.

Coinbase is not a bank, it's an exchange, and exchanges are absolutely not supposed to "commingle" (read: trade with) your funds. Even FTX paid lip service to this idea by structuring Alameda as a theoretically separate company.

You’re mixing up two different things.

When you're talking about "commingling" each client’s assets/deposits, yeah that's something all banks and wealth managers have done since basically forever. They will hold these assets in aggregate, and maintain a logical balance for each client somewhere (big piece of paper or a DB) then regularly (nightly at least) ensure the quantities of these two match (if they don't match somoeone needs to root-cause and fix ASAP). That's totally normal and I don't think anyone here has a problem with that.

What the OP is talking about is mixing up these client assets together with the cash and assets the company uses for its operations - payroll, trading, expenses, whatever. This is a huge no-no and regulators will come on you like a ton of bricks if they even catch a whiff of you doing this. This is meant to protect against dumb shit like FTX lending out all their client deposits to Alameda. It is still possible to fuck up under regulations like this but that'd probably be at the hands of either a very savvy fraudster in a senior-ish position in the organisation (who will certainly get caught no matter how much they cover their tracks) or a criminally incompetent CFO who hasn't been ensuring their ops staff are following processes.

Banks commingle with supervision from the state. Most countries will bail depositors if banks go under.

More info here, my forgotten $200 will be returned in this Feb https://help-jp.ftx.com/hc/ja/articles/14609943182233-FTX-Ja...

That’s a source that FTX Japan is returning assets, not that it’s the only regional one doing so. (LedgerX, an FTX holding, continued operations but I guess doesn’t count as a regional exchange?)

> The important thing about a "limited company" is precisely that the CEO and all of the other staff aren't legally equivalent to the company. That would be a partnership. This is a very useful technology in de-risking running a big business. There isn't a good reason for making the board liable for ordinary line of business failures.

> > Right now criminal penalties tend to just be the cost of doing business. Breaking the law isn’t scary, it’s a calculated risk.

> This, on the other hand, is a serious problem. It's why it's important for SBF and anybody who can be proved to have responsible knowledge of the fraud at FTX to go to jail for a long time.

In case of corporations problem is how influential they are. How they are able to capture regulators, bribe politicians to deregulate and how their size will cause rest of economy to collapse if they get penalties they deserve.

Only time I have seen any real action taken, was when rich investors got scammed. Especially if done by someone outside of elites. Stealing from lower/middle class OK, maybe you get small fine. Taking something from billionaire? You will be astonished how hard book can hit, when thrown with enough political/financial motivation.

> But in general power and money make you above the law

It's capitalism, people with capital make the rules.

> and voters are unwilling to take enough of an active informed involvement to fix this.

The problem is that to be informed in such cases it takes lots of time, money and effort. A second neverending second job and it only takes one mistake to get screwed. In most cases even government agencies that are supposed to oversee it, can't do so because corporations do a lot to obfuscate, hide and misdirect(also agencies funding gets cut so they can't go after expensive targets). How you are expecting individual to do something a dedicated/paid/staffed agency can't do. Especially when media corporations/politicians/NGO(another can of worms) actively lie on corporations behalf.

Also are you expect regulators to retire with government pay? They see what is going inside of corporations and they want their share.

Thank you for sharing this. The idea of corporations as paperclip maximizers has been floating around in my head for quite some time now and I’m glad I’m not the only one who has thought of this.

That’s like saying:

“Oh, you think multi-level marketing shouldn’t exist? It’s a form of storytelling so apparently you want to destroy all stories, you mean old culture-hater and book-burner.”

Even without formal immigration controls for transfer passengers I'm sure the European authorities are quite capable of consulting the flight manifests and arresting you in transit if they desire.

> Idk percentage wise how many companies lost a greater percent of their stock value than Bitcoin has in the past year, but we don't call them grifts.

Companies generally do other things besides being a vehicle for speculation.

They aren't badly in denial. They KNOW exactly how grifty the whole thing is. They KNOW that things like mpesa and similar exist in a lot of the supposedly developing world, and that the US banking infrastructure being stupid is more a matter of lacking policy than lacking technology. They KNOW that stupid "play to earn" game only really gave a few thousand people in the Philippines an income, while thousands and thousands more spent hundreds of real dollars to buy in and play and spend over ten hours a day "playing" a "game" that is closer to a slot machine than anything else. They KNOW that concept was no different to trying to earn a living by buying, opening, and selling CS:GO cases.

They don't care, or ignore these things, because eventually everyone figures out that there's not much to do with or for crypto that isn't scamming someone out of money or providing a vague crypto adjacent service. Nobody wants to buy regular products with crypto because for normal people, it is a pain in the ass to participate in crypto without getting scammed, and for crypto diehards, they know any dollar spent in the crypto ecosystem is inefficient because they are often purposely deflationary assets. They know that they spent a shitload of their savings on shitcoins, and that if the crypto world continues to struggle, that's an existential threat to them. They know that people NEED to buy in so that the price can go back up so they can cash out and save themselves. It's no different from desperate people in an MLM getting pushy with their facebook friends because they have $2000 in credit card debt buying Dotera product to stay "in their tier" or whatever nonsense the particular MLM uses, and the only way to get money back out of it is to become a conman.

For bitcoin, this site suggests ~90% (2 million bitcoin on exchanges vs 20 million in circulation)

https://www.coinglass.com/Balance

These look like centralized systems, which require trust. Am I missing something?

Illegal doesn't necessary mean that something is morally wrong. I'm all for making ransomware actors life harder, but it should not come at the cost of also affecting regular drug buyers/sellers.

Exactly. It’s like the folks who say these things don’t understand they are defending criminal activity. Now, one can argue things like the sale of “illegal drugs” shouldn’t be illegal in the first place, but that’s an advocacy issue not solved by decentralized payments. All you do with decentralized payments is make it exponentially more efficient to engage profitably in illegal activity. Not exactly ideal given much of what constitutes illegal activity is well deserved to be outlawed (sex trafficking, murder for hire, etc…)

There was Liberty Reserve, Webmoney, e-gold. Even now there's a bunch of sketchy EMIs in Belize and Lithuania like Advcash and Perfect Money. Ransomware before just wasn't highly targeted because "installs" were a lot cheaper and there was lots of other profitable easier scams to run like spamming pharma, FakeAV, etc. An increased amount of attacks like the Colonial Pipeline hack may have coincided with the rise of cryptocurrency but I think it would have happened even without it. There has always been groups that "cash out" fradulent wire transfers for 50-60%, go read wwh-club[.]vip or bhf[.]io if you want to know more (I read these occasionally out of curiosity but there are more "elite" forums out there). Not really any reason to think most of these attacks couldn't have worked with just paying ransom by wire transfers, especially when you consider that after the money has gone through a few countries it is practically unseizable given the amount of time international cooperation takes.

No I don’t and what does todays announcement have to do with FTX? Aside from showing that the US government is proactive at investigating irrelevant exchanges while failing to protect anybody from mismanaged and systemically important exchanges.

DDoS attack reflected in a monthly Cloudflare email report?

Only about 0.15% of crypto transactions last year were illicit, compared to 5% with fiat money. Cash is by far the pinnacle of "crime money", definitely not cryptos.

https://blog.chainalysis.com/reports/2022-crypto-crime-repor...

Binance can't operate in the US like Coinbase, that's why they have Binance US which is pretty small. FTX was setup similarly. https://coinmarketcap.com/rankings/exchanges/

Isn’t this quit difficult to do? Surely trades almost perfectly map to profits?

Last time I looked, there were withdraw limits on non-KYC'd accounts. Anything of quantity gets immediately locked down.