[hailwren]

Coinbase avoided this fate by being a us regulated company. FTX.us is still above water. It’s the Bahamas based company that was able to cook the books and is now defunct.

As for Binance, they have the SAFU (https://academy.binance.com/en/glossary/secure-asset-fund-fo...) which they just topped up to $1B at current market prices (today). You can verify the balances on chain, but there aren’t any statements about outstanding obligations, and there are no guarantees that those funds haven’t been earmarked for other things.

[TedDoesntTalk]

Coinbase is listed on NASDAQ and has significant reporting requirements because of that. Civil and maybe criminal penalties for the board if they lie on SEC filings.

[denlekke]

$1B doesn’t rly reassure me unless I’ve misunderstood. Ftx had $6B in withdraws in 72hours (which they fulfilled) so I don’t rly think binance has shown anything that would provide real protection against a bank run like we just saw.

[hanniabu]

> FTX.us is still above water

FTX.us has been under SEC investigation for security fraud for months, so still too early to make this call

[djbusby]

They making the claim of "above water" for $NOW. It's not to early call $NOW but it is too early to call $NOW+30D

[paxys]

> FTX.us is still above water

I wouldn't be too sure of that. Sequoia just emailed all their LPs saying that they are marking down their investment in FTX.com and FTX US to $0.

[dav43]

So their "Secure Asset Fund for Users (SAFU)" are crypto funds. If that's not pulling the wool over everyone's eyes. This industry needs to die.

[015a]

About 40% of the SAFU is in BNB; their own FTT-like token. Its literally the same reason FTX collapsed; BNB just still has value.

[matheusmoreira]

BNB isn't a token though. It's a real cryptocurrency like ETH.

[015a]

Sure, but the point is that if Binance were ever in a position to where they needed to start liquidating the SAFU, its reasonable to assume that the market for BNB would be in a very poor state; either because of whatever caused them to need to liquidate the SAFU, or because of the liquidation itself. BNB's typical 24h volume is only around 8x the total amount of BNB in the SAFU.

More broadly, the existence of the SAFU should raise eyebrows. If they're acting as a depository trust, in other words maintaining a 100% reserve ratio, then why does the SAFU need to exist? Maybe just marketing? Giving cryptobros something to point at to say "Binance is safe"? I guess that's fine. I don't know; just weird.

Its like, imagine if JP Morgan only dabbled in 0% interest checking accounts, literally just took your money and put it in a box, then said "we've got a billion dollars here to pay out in case we go bankrupt. Half of it is in JP Morgan Stock, that should be fine right?". The situation doesn't make much sense to me, but I may be missing something.

[55555]

Yeah agreed. This seems needlessly risky.

[digianarchist]

How are they insulated from each other? I always assumed that one holds the other. Correct me if I'm wrong?