No one here is saying this is completely analagous to Fidelity filing for bankruptcy. It isn’t. You are trying to attribute views to me I don’t have. I even already mentioned the laws that prioritize underinsured bank deposits over GU creditors.
Right, silly me thinking it’s a problem when the entire crypto ecosystem is shot through with fly-by-night scams. Don’t know why Trolly would get worked up by that, must be bad-faith trolling!
I’m saying that from what I can see Coinbase promotes itself like some kind of brokerage company but for crypto. But if they set themselves up so their customers are treated as unsecured creditors in a bankruptcy, then it’s nothing like that at all because it lets the company borrow with their customer’s money as collateral. So to your point of “what, do you think people think it’s FDIC insured?” No, of course no one thinks that. But they probably think it might be handled like a brokerage account, because that’s how coinbase presents themselves. Coinbase could have set themselves up like that but oopsie, didn’t. They set it up so they could borrow money with their depositors’ money as collatoral. Weird!
I don’t think most people putting money in crypto think they are backstopped by anything. It isn’t like failures/scames/etc are anything new. Pretty much the first exchange, Mt Gox, failed. Now does that mean i think we don’t need any basic regulation? No. Of course we do.
Like if you think putting money in Coinbase is the same as Fidelity then that is actually partially a you problem because you aren’t taking the time/effort to understand the bare minimum of who you are giving your money to.
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You’re not worked up by it. You miss the AC days from 2p2 and you’re constantly trying to recreate that dynamic in this thread. But you seem to forget we’re all veterans of the same war and we recognize exactly what you’re doing.
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Bottom line is there are a lot of problematic issues and scams in crypto. I don’t think any of the “NFT bros” is actually in any disagreement about that. Rational conversations can be had and frankly the big discord meme is that literally everything is a scam(e).
People don’t like the constant bad faith trolling. I personally view it as similar to my parents asking me over and over “but how much did you lose” with poker and not even having the basic decency to understand what it was I was doing.
For the record I don’t think Keed was trolling here for example. Which is why I will respond in good faith. Riverman on the other hand who came here to repost a link he found in the stonks thread and came here to repost was straight trolling so he gets the trolling right back at him.
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Right, there is plenty of cheating and scams in poker, yet when some rando comes up and says online poker is rigged you’re still going to roll your eyes at them.
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Ok so what are we arguing about here? You brought up FDIC, and I pointed out that it was more like brokerage deposits in excess of SIPC protection. And I assume you agree those customer assets would be treated very differently than the coin base deposits in a brokerage bankruptcy. And if coinbase’s customers would be treated as unsecured creditors, that’s giving the company a free hand to loot those deposits by borrowing against them.
Literally all you do ITT is condescend and throw ad homenim attacks at me. Come back when you’ve got anything remotely responsive to say.
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I don’t think we are arguing about anything really. People depositing money in Coinbase, a US facing publically traded company, deserve more protection.
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Can we not do this?
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I think we are on the same page here. Seems like some kind of SIPC for consumers is badly needed or else these exchanges need to be shut down.
It’s just a highly immature and unregulated industry overall. Which of course comes with all the usual problems. I mean crypto is basically a redux of internet poker on steroids in many ways.
Dutch Boyd had his own poker site at one point. Now multiply that times 1000 or so.
That being said there are is a lot of money to be made in non-scammy ways by non-morons. That part is interesting to me. It tickles the same part of the brain poker did.
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I don’t think they have a free hand to loot them. That would likely be fraud. (Like I don’t think they could just borrow a few billion and cash that out). I’m also not sure you could really use them to borrow against - would a creditor really want to have a secured claim against customer funds? Seems high risk for that creditor in that the bankruptcy court could easily find that secured claim is not valid.
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There is no evidence they are actually looting them or anywhere close to insolvent. Their filing shows that they currently have customer custodial funds approximately equal in value to the amount of their custodial funds due to customers. In addition to these funds, they also hold over $6 billion in cash and cash equivalents vs. debt of $3.4 billion. So it does not appear that they are using customer funds in any way, plus they have excess capital of about $2.6 billion.
Again, I’m not saying this issue shouldn’t be addressed and resolved in a way such that customer funds are 100% secured, but think right now it’s more a theoretical risk (at least as to Coinbase customer funds).
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“Looting” is hyperbolic but if they can actually borrow billions with tens of billions of customer money as collateral, then that makes borrowing money a lot easier. The deposits wouldn’t be offered as collateral explicitly, but if the lenders are set up as a senior class…
If that’s what is happening then the ease of getting loans could warp the incentives for business decisions, and not in a way that benefits customers.
I don’t know how corporate bonds work, is collateral explicitly listed for secured bonds? And then is only the explicitly listed collateral recoverable?
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The nail on the head analogy is just regular finance in the 1920s before the Great Depression. That is why Riverman thumbs his nose at, it’s exactly what he does just without the still insufficient regulations that were layered onto regular finance after every bust. If you think the actual utility of crypto is meh, then it’s starting regular finance from scratch and giving hucksters the ability to very easily re-run the same plays of hucksters of old with virtually no regulation or oversight.
The “it’s just like my mom saying I’d lose money at poker” point you keep repeating is weird. Nobody is worried about you in particular just like I shrug about the handful of sharp and still honest people who are able to wisely navigate any other boom, bust cycle.
The mom analogy is that a few people here don’t even take the time to understand the basics of what the “NFT bros” are doing and then do the fake hand wringing and moralizing part. How could I ever respect that. I don’t think they are concerned with my wellbeing. Neither were my parents.
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I don’t see why not. This is the most accurate description of the internet I’ve ever heard:
Conceded that nobody is worried about your well being either way, lol. The braintrust in the Discord thread seems similar to me to trailing some super sharp geek traders on Wall Street…. meaning it’s intriguing. I personally didn’t do it because it seemed like too much of a hassle/time suck and by the time I was convinced you guys had some expertise at this the market was already super high.
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And really you aren’t missing much at this point. The returns are nothing like what they were last year and even earlier this year.
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