More platforms will bite the dust?

[o_e_l_e_o]

Your own wallet is the only safe place for your coins right now.

That's true in most cases, but it also depends on the type of coin.

Sorry, I should have been more specific I was referring to bitcoin. If you dabble in centralized shitcoins, then your coins are never safe, regardless of what you do with them.

Kris Marszalek wants everyone to know that his company, Crypto.com, is safe and in good hands. His TV appearances and tweets make that clear.

Oh well, that settles it then. We've definitely not heard this exact statement from any other centralized platforms which then went on to collapse within weeks or even days. Right!?

Now, let's take a look at the actual report:

Crypto.com has requested that we perform an AUP engagement on the customers’ cryptocurrency holdings and corresponding liability of funds owed to the customers of Crypto.com as at 00:00:00 Universal Time Coordinate (“UTC”) on 7 December 2022 (“the reporting date”).
...
This AUP engagement is not an assurance (financial audit) engagement. Accordingly, we do not express an opinion or an assurance conclusion.

So, in summary, not an audit, provides no assurances, and only looks at their liabilities to individual customers, and not any other liabilities they may have. And let's just ignore the fact that CRO - the centralized token they control and can print at will to sell and prop up any other insolvent part of their business - was suspiciously missing from this not-an-audit.

So, as I've said countless times over the last few weeks, this proves absolutely nothing and any coins which are stored on crypto.com continue to be at risk, just as with any centralized exchange.

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[bbc.reporter]

News update.

According to some people in social media, the exchange has shutdown internal communications groups for employees and internal feedback channels following circulating rumors of laying off hundreds more of employees.

Onchain analyzers similar to Nansen have begun recording the outflows from the exchange and it appears they are suffering heavy outflows. If this becomes a liqudity crisis, I reckon this will be something very much like a bank run.



There were rumors that Huobi planned to lay off hundreds of employees in the coming weeks. Perhaps the rumors have now been confirmed, as the exchange said that it will lay off hundreds of employees in the coming weeks.

Ever since the news hit the streets, the TRX token fell by 7.48% in the last 24 hours, followed by Huobi’s HT token, which also lost 11% during the same period, according to the data from CoinMarketCap. Furthermore, TRON’s stablecoin USDD has depegged and is now trading at $0.9787. Now, according to the latest reports, the exchange is experiencing heavy outflows.

According to the Nansen data, the Huobi exchange is witnessing turbulent trading and outflows of $64 million in the last 24 hours. On-chain data also reveals that the exchange has experienced over $100 million in weekly outflows.

Source https://watcher.guru/news/huobi-exchange-experiences-millions-in-outflows-amidst-the-layoff-drama

[yhiaali3]

A large number of layoffs is not necessarily an indicator of the bankruptcy of the exchange, these things happen in bear markets and also during economic recessions when there is less work and less profits.

But by reading the percentages in which workers were laid off from the various exchanges, we can find an indication of the status of the exchange in general. For example, Crypto.com laid off 2,000 employees, which is the largest number I think, and there was some talk recently about the existence of financial problems and the possibility of collapse after FTX .

In any case, whether these indications are correct or not, centralized exchanges are no longer a safe place to store crypto assets. The only safe place is the wallet that has its own private keys.

[o_e_l_e_o]

A large number of layoffs is not necessarily an indicator of the bankruptcy of the exchange, these things happen in bear markets and also during economic recessions when there is less work and less profits.

A handful of layoffs can be normal or expected. Firing 50% of your workforce is something different entirely.

And it's not just the layoffs. They are cancelling all staff bonuses and cutting pay for the employees they aren't firing. Apparently they are also forcing all employees to take their salary in stablecoins rather than in fiat. And after those announcements, Justin Sun shut down all internal communications because his employees were rightly going mad. There have been huge outflows from the exchange. Not least of all Justin Sun himself cashing out over $1.5 billion over the past couple of months.

There is something big happening at Huobi, and they could very well be the next exchange to collapse. Withdraw all your funds now, if it isn't already too late. Also make sure you delete any Huobi apps from your devices, given what happened with SBF/one of his employees pushing malicious auto-updates to FTX's app after they became insolvent.

[bbc.reporter]

The much endorsed cryptobank might also be another platform that might bite the dust? It appears that everythng might be nearing the very bottom with all these crypto platforms capitulating everywhere.

It also appears they want a bail out when their executives mentioned that they might become a takeover target hehehe. It will not be shocking if CZ's team is talking to them already.



Silvergate Capital Corp. shares plunged after the bank said the crypto industry’s meltdown triggered a run on deposits, prompting the company to sell assets at a steep loss and fire 40% of its staff.

Customers withdrew about $8.1 billion of digital-asset deposits from the bank during the fourth quarter, which forced it to sell securities and related derivatives at a loss of $718 million, according to a statement Thursday. Executives said on a conference call that Silvergate may become a takeover target.

Source https://finance.yahoo.com/news/silvergate-tumbles-ftx-implosion-prompts-140334817.html

[o_e_l_e_o]

Silvergate Capital Corp. shares plunged after the bank said the crypto industry’s meltdown triggered a run on deposits, prompting the company to sell assets at a steep loss and fire 40% of its staff.

Customers withdrew about $8.1 billion of digital-asset deposits from the bank during the fourth quarter, which forced it to sell securities and related derivatives at a loss of $718 million, according to a statement Thursday.

Huh. And here I though one bitcoin = one bitcoin. But it turns out if a customer deposits one bitcoin, the price of bitcoin in fiat falls, and they then try to withdraw that one bitcoin, suddenly that one bitcoin isn't worth one bitcoin anymore and the exchange needs to sell a bunch of other assets to let that one bitcoin be worth one bitcoin again? Isn't that weird!

In other words, they were doing what every other insolvent exchange over the past few months has been doing, and were running a fractional reserve system while using customers' deposits to gamble on various investments for their own profit, loan out to questionable third parties for their own profit, or maybe even just spend outright like FTX were doing.

[bbc.reporter]

Silvergate Capital Corp. shares plunged after the bank said the crypto industry’s meltdown triggered a run on deposits, prompting the company to sell assets at a steep loss and fire 40% of its staff.

Customers withdrew about $8.1 billion of digital-asset deposits from the bank during the fourth quarter, which forced it to sell securities and related derivatives at a loss of $718 million, according to a statement Thursday.

Huh. And here I though one bitcoin = one bitcoin. But it turns out if a customer deposits one bitcoin, the price of bitcoin in fiat falls, and they then try to withdraw that one bitcoin, suddenly that one bitcoin isn't worth one bitcoin anymore and the exchange needs to sell a bunch of other assets to let that one bitcoin be worth one bitcoin again? Isn't that weird!

In other words, they were doing what every other insolvent exchange over the past few months has been doing, and were running a fractional reserve system while using customers' deposits to gamble on various investments for their own profit, loan out to questionable third parties for their own profit, or maybe even just spend outright like FTX were doing.

Hehehe, however, it appears that they will not be one of the next platforms to bite the dust. Silvergate bank recently might have received a bail out of $4.3 billion from the Federal Home Loan bank of San Francisco. This occured before the news article from Yahoo Finance.

It appears everyone is late on this update. However, Silvergate bank might still be a takeover target especially because of the $4.3 billion that they are presently holding hehehehe.



At December 31, 2022, the Company held $4.3 billion of short-term Federal Home Loan Bank advances.

Source https://ir.silvergate.com/news/news-details/2023/Silvergate-Announces-Select-Preliminary-Fourth-Quarter-2022-Financial-Metrics-and-Provides-Business-Update/default.aspx

[o_e_l_e_o]

Hehehe, however, it appears that they will not be one of the next platforms to bite the dust. Silvergate bank recently might have received a bail out of $4.3 billion from the Federal Home Loan bank of San Francisco. This occured before the news article from Yahoo Finance.

Oh cool. Tax dollars being used to bail out scammy centralized exchanges which are busy gambling/losing all their customers' deposits.

A bail out also doesn't mean they are safe. Plenty of large companies have received bail outs and still gone under. BlockFi even received a bail out only weeks prior to their collapse (from FTX, no less). And as I understand it, there are many other centralized exchanges which use Silvergate, so if they do collapse then again we could easily see a large domino effect spread to other exchanges.

So as always, get your coins in to your own wallets. Who in their right mind is still using centralized exchanges at this point!?

[Lucius]

~snip~
So as always, get your coins in to your own wallets. Who in their right mind is still using centralized exchanges at this point!?

Apparently millions of those who live in the belief that CEX are crypto banks and that there is no reason not to trust them. Even when the famous CZ is included in the whole story with the claim that 99% of users will sooner or later lose everything if they use non-custodial wallets, I'm not at all surprised that almost nothing has changed after FTX.

After all, even some forum members who have access to information see nothing wrong in continuing to believe in various crypto messiahs who promise them that they will never let them down.

[Z-tight]

And as I understand it, there are many other centralized exchanges which use Silvergate, so if they do collapse then again we could easily see a large domino effect spread to other exchanges.

That is another factor to consider for people who think the centralized exchange they store their money in is safe and wouldn't collapse, there are many external factors that can cause an exchange to collapse, which includes and not limited to the collapse of another different exchange or service, which leaves many centralized services connected to it exposed and might lead to them going bankrupt too.

It has happened with many centralized exchanges and services, it happened with ftx, and it can happen with another centralized service soon, which may affect even the 'biggest' exchanges that people think is safe for them to keep their money in.

[o_e_l_e_o]

Apparently millions of those who live in the belief that CEX are crypto banks and that there is no reason not to trust them.

Because as we all know, fiat banks are the epitome of trustworthiness. Certainly no insider trading, tax evasion, money laundering, market manipulation, dodgy loans, money printing, etc., etc.

It has happened with many centralized exchanges and services, it happened with ftx, and it can happen with another centralized service soon

Going bank further than FTX, the thing which kicked off this run of insolvent exchanges was Three Arrows Capital being liquidated, which then led to Voyager and Celsius, which then spread to others, and so on. And it doesn't even have to be another exchange. Some critical bug in an altcoin which results in the price tanking could be more than enough to bankrupt an exchange holding a large amount of that altcoin.

Even something completely unrelated to your chosen exchange can result in you losing all your coins. Doesn't matter the exchange - if your coins are not in your own wallet, they are not safe.

[bbc.reporter]

~snip~
So as always, get your coins in to your own wallets. Who in their right mind is still using centralized exchanges at this point!?

Apparently millions of those who live in the belief that CEX are crypto banks and that there is no reason not to trust them. Even when the famous CZ is included in the whole story with the claim that 99% of users will sooner or later lose everything if they use non-custodial wallets, I'm not at all surprised that almost nothing has changed after FTX.

After all, even some forum members who have access to information see nothing wrong in continuing to believe in various crypto messiahs who promise them that they will never let them down.

Whales use centralized exchanges because the markets in them have more liquidity. Give me an example of a decentralized exchange where a trader who trades millions of dollars per trade can buy or sell everyday without moving the market.

In any case, for ordinary people in the cryptospace similar to many of us, I agree. This is a reason why there is an argument that ordinary people in the community should try Defi. We can trade in Defi without giving up the custody of our coins.

[o_e_l_e_o]

Whales use centralized exchanges because the markets in them have more liquidity. Give me an example of a decentralized exchange where a trader who trades millions of dollars per trade can buy or sell everyday without moving the market.

If someone is making trades of that size, then they aren't going to Coinbase and just dropping an order for 500 BTC on their order books. They will be trading OTC, and will have much more in the way of legal protections and guarantees than the 99.9% of regular centralized exchange users.

This is a reason why there is an argument that ordinary people in the community should try Defi. We can trade in Defi without giving up the custody of our coins.

I think the vast majority of people should use decentralized peer to peer exchanges, in order to benefit from the security and privacy they provide, and not lose their coins in the next centralized exchange which goes bankrupt. But I would never recommend a project which styles itself as "DeFi". As with every other fad in this space, the vast majority of DeFi projects are not decentralized in the slightest, and many of them turn out to be outright scams.

[bbc.reporter]

@o_e_l_e_o. I am talking about whale traders, not the whales who belong to the banking insitution category. Institutions want their own trading desk with their own orderbook or a trading desk of another institution that they trust.

Also, should the community be more concerned on Binance or is it still considered reasonably safe from being the next exchange to bite the dust?



Mid-day Wednesday, federal prosecutors proudly announced criminal charges against Bitzlato, a Hong Kong-based cryptocurrency exchange. The exchange’s founder, Russian national Anatoly Legkodymov, apparently known by the nickname “Gandalf,” was arrested last night in Miami.

Source https://decrypt.co/119494/crypto-panics-then-jeers-at-doj-announcement-of-major-action-against-tiny-chinese-exchange-bitzlato



This is where the news on Bitzlato becomes more concerning for Binance.



Approximately two-thirds of Bitzlato’s top receiving and sending counterparties are associated with darknet markets or scams. For example, Bitzlato’s top three receiving counterparties, by total amount of BTC received between May 2018 and September 2022 were: (1) Binance, a VASP; (2) the Russia-connected darknet market Hydra; and (3) the alleged Russia-based Ponzi scheme “TheFiniko.”

Source https://www.fincen.gov/sites/default/files/shared/Order_Bitzlato_FINAL%20508.pdf



The big outflows, the mass liquidations, the undercollateralization on BUSD and presently this news on Bitzlato should make the community more concerned, I reckon.

[o_e_l_e_o]

Also, should the community be more concerned on Binance or is it still considered reasonably safe from being the next exchange to bite the dust?

No exchange is safe. We are seeing DCG's subsidiaries starting to have major problems. Everyone knows about the problems with Grayscale over the last year or so, and now Genesis are reportedly preparing to file for bankruptcy. They are also selling off CoinDesk. DCG have tens of billions of assets under management. If they are not too big to fail, then neither is Binance or Coinbase or any other exchange.

Approximately two-thirds of Bitzlato’s top receiving and sending counterparties are associated with darknet markets or scams. For example, Bitzlato’s top three receiving counterparties, by total amount of BTC received between May 2018 and September 2022 were: (1) Binance, a VASP; (2) the Russia-connected darknet market Hydra; and (3) the alleged Russia-based Ponzi scheme “TheFiniko.”

So how long before Binance start to get investigate for money laundering?

[Z-tight]

Also, should the community be more concerned on Binance or is it still considered reasonably safe from being the next exchange to bite the dust?

I know that many people have failed to understand how risky exchanges are, that is why they think some are reasonably safe to keep their money, the best decision for people that use centralized exchanges in the crypto market today is for them to take every exchange as being unsafe and consider that they can collapse at anytime, if people do that, then they would only trade on these exchanges and withdraw their money into self custody immediately, and if they are day traders, they would only leave a small amount in the exchange for that purpose.

But i don't think it helps anybody if we continue to debate which exchange is reasonably safe and incapable of biting the dust, i would never recommend any exchange under that category, so people do not take my advice and lose money later on.

[bbc.reporter]

Also, should the community be more concerned on Binance or is it still considered reasonably safe from being the next exchange to bite the dust?

No exchange is safe. We are seeing DCG's subsidiaries starting to have major problems. Everyone knows about the problems with Grayscale over the last year or so, and now Genesis are reportedly preparing to file for bankruptcy. They are also selling off CoinDesk. DCG have tens of billions of assets under management. If they are not too big to fail, then neither is Binance or Coinbase or any other exchange.

Approximately two-thirds of Bitzlato’s top receiving and sending counterparties are associated with darknet markets or scams. For example, Bitzlato’s top three receiving counterparties, by total amount of BTC received between May 2018 and September 2022 were: (1) Binance, a VASP; (2) the Russia-connected darknet market Hydra; and (3) the alleged Russia-based Ponzi scheme “TheFiniko.”

So how long before Binance start to get investigate for money laundering?

I am not arguing that Binance is 100% safe. I am asking how concerned should we be on Binance. Is there a bigger chance than expected that it will be one of the next exchanges to bite the dust or is it still reasonably safe if compared to other exchanges that might bite the dust?

I speculate on October when Sam Bankrupt-Fried's trial begins, everyone should begin avoiding Binance because CZ will be one of the people who will be blamed for market manipulation on FTT that triggered the collapse of FTX. A crackdown might be ordered on CZ and Binance.

[Woodie]

There are people in social media that have warned to be cautious with platforms that offer high APY and those platforms that have laid off employees from jobs in their companies.

Kraken, Coinbase, Crypto.com and Bybit did the biggest layoffs for exchanges this year according to the data in this spreadsheet which was created by Wublockchain.

Reason is based on APY I honestly think this is a bais opinion because layoffs are not synonymous to crypto companies at the moment, other top known companies IRL such as Twitter, Alphabet, Amazon, Google list goes on have laid off several of its employees citing reasons from improved technology such as AI introduction, or simply cutting costs of running these companies against huge wage bills.

For our crypto companies it's likely that this happened because crypto value dropped and could not support the wage bill unless a bullish miracle happens to save the employees jobs.

[o_e_l_e_o]

Is there a bigger chance than expected that it will be one of the next exchanges to bite the dust or is it still reasonably safe if compared to other exchanges that might bite the dust?

I am of the opinion that all exchanges are equally risky. We all have absolutely no idea what is going on behind the scenes at any exchange until it is too late and they are filing their bankruptcy documents showing just how negative their balance books are and just how much in debt they are. Go back a year and everyone though Celsius, Voyager, FTX were some of the most well regulated and least risky exchanges. And look at where we are now.

I speculvate on October when Sam Bankrupt-Fried's trial begins, everyone should begin aoiding Binance because CZ will be one of the people who will be blamed for market manipulation on FTT that triggered the collapse of FTX. A crackdown might be ordered on CZ and Binance.

If the authorities do enforce some kind of sanctions on Binance, they will be put in place without warning and will be enforced before anyone has a chance to react. Waiting to hear news of such sanctions before you withdraw your coins leaves you at risk. Withdraw now.

[Elpeor00]

Actually, I'm wondering about how the notoriously scammy, shittier platforms endure the bear seasons while the more professional and (over?) hyped ones fall as flies, is almost funny

Is there a bigger chance than expected that it will be one of the next exchanges to bite the dust or is it still reasonably safe if compared to other exchanges that might bite the dust?

I am of the opinion that all exchanges are equally risky. We all have absolutely no idea what is going on behind the scenes at any exchange until it is too late and they are filing their bankruptcy documents showing just how negative their balance books are and just how much in debt they are. Go back a year and everyone though Celsius, Voyager, FTX were some of the most well regulated and least risky exchanges. And look at where we are now

But seriously, as long as Bitcoin and altcoins are regulated as securities and no currency, the fully regulated exchanges are the risky ones in a bear market. They are compelled to treat the price's downs as capital loses, when in a perfect world the exchange earn its money by traded volume ( higher in both bull and bear markets than in stable ones)