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Comment by nabakin | Hacker News Reader

Oh I have a Binance story. Back when Binance was smaller, they had a system to let cryptocurrencies compete to join their platform. Every month or so, the cryptocurrency community which bought the most BNB was added to their platform. They presented it as a fair competition, saying the intention was to add the most popular cryptocurrencies through votes and only one BNB per user was allowed. When I discovered a cryptocurrency community was blatantly cheating the system, creating fake accounts, spending thousands of dollars in BNB funded by the creators of the cryptocurrency (in a public Discord server), I contacted Binance to get them disqualified or at least a warning, but despite mountains of evidence, Binance did nothing. It was just a scam to prop up BNB. From that point, I knew what kind of company Binance was and never trusted them with my money.

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What exchange do you currently use?

None. Hardware wallet. I haven't heard anything bad about Kraken and it's been around for awhile. Coinbase seems stable

This is a good story & example of Binance being shady - but it's interesting you needed to see it first hand to not trust them.

Ah yes, the evils of [checks notes] empiricism.

"You must learn from the mistakes of others—you will never live long enough to make them all yourself." A certain amount of scepticism of second-hand knowledge is a virtue, but it can easily be carried into vice.

I mean.. yes - but have you ever worked in a 2-year old start-up/Fintech? Those companies aren't even remotely ready structurally for the traffic and volumes that they're handling (successful ones that is). I don't think it's so much a conscious decision against compliance as it is just one in favour of volumes, that's unfortunately a necessary decision to make for a 2-year old Fintech, but it usually comes back to bite them at some point in the future - question is just how devastating is that bite

Sure, yes, it is, on its face, much easier & cheaper to operate without proper compliance/legal/fraud departments.

And yet..

> don't think it's so much a conscious decision against compliance

I presumed as much until I read the CFTC's allegations. Unfortunately, Binance looks like a criminal enterprise [1]. FTX, in comparison, looks like childish incompetence.

[1] https://news.ycombinator.com/item?id=35329117

Very apt comparison of the two.

alright fair enough - reading it in detail now as well - this doesn't look like 'uncontrolled growth' and more like criminal intend

>FTX, in comparison, looks like childish incompetence.

Key phrase: "looks like"

FTX looks like theft in the veneer of childish incompetence. It's like SBF read in a book that as long as you smile and nod and act dumb, you can't have mens rea.

>FTX, in comparison, looks like childish incompetence.

no, it isn't. It's a scheme designed - from day one - to take retail dollars and gamble them on crypto markets because line (was) go up. And then when line went down, everyone's money was lost. It was built on a lie - from day one!! - making it a deliberate fraud and a scam. That's not childish, it's criminal, and the incompetence was thinking crypto line go up forever and FTX/Alameda can play heads I win, tails you lose.

FTX took customer deposits and invested them in their failing hedge fund which lost tons of money. That was not childish incompetence, that was malicious and calculated fraud.

Maybe Fintech companies should stop trying to apply the "growth at all costs" mindset to finance and instead focus on not scamming their users?

Focus on "not doing crimes" is a pretty solid baseline for any business, I would think. And yet I keep getting surprised.

> I don't think it's so much a conscious decision against compliance

You haven't even bothered glancing at any of the linked material, have you?

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