[FUD] btc-e is also running fractional reserve

[keithers]

Um. Blockchain.info is not an exchange, and has no reserves (or BTC) for that matter.

/ignore rest of post.

The above is correct.   In regards to BTC-E.com, they don't really need to do anything until people start having major problems with withdrawals.  The have a large enough user base, and have operated very efficiently for a long period of time.   If you don't leave all your coins on the exchange (which you shouldn't be doing anyway), you are only exposed with the coins that you are day trading.

[itsunderstood]

I don't have any problems with BTC-e, they do fine by me, thanks.

However, one important thing is that an exchange by its nature, can change hands quickly, and can begin to fractionalize their coins at any time.  I am saying that when you allow someone to mint coins and then trade coins, it is like giving a coke addict the keys to the coke room, how would anyone remain good, when they could get stringarmed/endebted and then just start fractionalizing their coins in the background?

Of course the blockchain would tell on them, so they'd have to blame some TX flaw on bitcoin to get the time to really hold the widow open long enough to screw all the final people as well, in terms of recent history.

[keithers]

did the OP add "FUD" to the thread title, or did a mod?  haha

[earonesty]

Until a bitcoin exchange/business passes an audit by an outside/independent body (and continues to do so at regular intervals), why should

You don't need an audit.   This is Bitcoin, you can publish a signed ledger and tree of debits showing your holdings in BTC, LTC, etc.   

The fact that they are not doing so, despite being repeatedly asked, is very telling.

I pulled all my money out of btc-e, shortly after they refused to respond to the new protocols allowing the signed publishing of reserves and debts.

http://www.reddit.com/r/Bitcoin/comments/1yk4nv/please_ask_your_favorite_exchange_to_prove_that/