[vkou]

I have a feeling that the informed, consenting adults who have funds in that exchange will soon discover exactly why dealing with an unregulated, secretive foreign financial company (Whose owners keep their identities secret, so that they won't be arrested) is a bad idea.

HSBC has none of these properties (Which are more important to their legitimate users.)

[sillysaurus3]

If you're keeping coins on any exchange -- even Coinbase -- they are no longer your coins. You've just loaned them. And you may eventually discover why that is a very bad idea.

No one thinks "It could happen to me" until it's too late. Stop keeping coins on exchanges. Stop using third party wallets and other software. If you want to invest in coins because they might go up, that might make sense, but at least treat it like a serious investment.

[joosters]

If you're keeping coins on any exchange -- even Coinbase -- they are no longer your coins. You've just loaned them. And you may eventually discover why that is a very bad idea.

Since you have to use an exchange to obtain or sell crypto currency, this 'advice' is just pointing out the terrible flaws in bitcoin/ethereum/whatever. There will be plenty of users who were in the middle of cashing in/cashing out and have now lost all their money, and you're just saying "it's your own fault"

[cookiecaper]

You don't have to use an exchange to obtain cryptocurrency. You have to use an exchange to convert conventional fiat money into cryptocurrency. If you buy or sell natively in bitcoin, you don't need an exchange.

Currency exchangers have been around for a very long time and there's nothing inherently bad about depending on one. All the other currencies do.

[vertex-four]

I've bought and sold cryptocurrency without using an exchange personally. It works fine.

[nannal]

Well you don't "have" to use an exchange, if you want to meet in person and hand me a big sack full of coins, or your car, I can transfer you bitcoin.

[SomeStupidPoint]

...But my 'serious' investments are handled by accounts through third parties that mediate my purchases on the exchanges. They're probably even lending out 'my' shares.

It's just a sign that cryptocurrencies are new (and insecure) that I can't do the same with them.

[cinquemb]

Seems like people want to treat currencies the same way people have been used to thinking about what traditional banking has become today.

For those among us that want to ignore the long history of banking and coinage in general, some depositors in greece may have recently seen similar analogues to why banking in a particular locale turned out to be a very bad idea.

Though you'll have people debate the relatively philosophical differences all day compared to the parties who have ended up on the wrong sides of the above.

What I'm more interested in is: how does all of this change the landscape of incentives of actors of all sizes, and what capabilities does it give to such that weren't accessible to such (or any) degree compared to before?

[vkou]

People who were only storing money in the exchange for the short term (To conduct trades) got robbed too.

When I open a trading account on a stock exchange, it's not longer my money. I've loaned it.

I do have more confidence that its owners won't be arrested for money laundering, followed by all my funds dissapearing to a Bahaman slush fund, though.

In another thread (About the SEC regulating ICOs), there were a number of people encouraging investment into and downplaying the risk of unregulated, opaque financial securities ran by persons not based in the US. Rail against the SEC all you want, but events like this are why it exists. Fraud erodes trust in the market.

[paulsutter]

The brokerage only owns the stocks in your account if you enable margin on the account (you dont even need to use margin, if you enable margin they own what's in the account and if they go bankrupt your account is gone too).

If you keep margin disabled, you'll eventually get it all back even if the brokerage goes bankrupt.

During the financial crisis, I asked a broker to disable margin on my account (never used it anyway). It took weeks before that happened. Some "technical holdup" that they assured me had nothing to do with loaning or pledging the contents of my account.

[zimbatm]

Same for PayPal accounts, this isn't limited to e-coins.