[adam_arthur]

They say “backed by assets”

Are those assets cash or cash equivalents? If not then they aren’t really backed at all.

Saw a tweet from the kraken CEO stating they didn’t have exotic things on their balance sheet, only things like bitcoin. Well a bitcoin backing is pretty much just as bad.

Do they convert customer deposits to bitcoin or not?

[amadeuspagel]

I would assume that if someone has a certain amount of bitcoin in their kraken account, then kraken has the same amount of bitcoin backing that, and the same for everything else.

[adam_arthur]

Why would you assume that when every other exchange is starting to prove that they don’t

[amadeuspagel]

I'm trying to explain what people mean when they say that they are “backed by assets”. Whether they actually are is another matter.

[adam_arthur]

Customers deposits must be backed by cash, not assets. Because the second those assets lose value the deposits are no longer covered.

Any exchange that doesn’t publish their full balance sheet can be considered fraudulent at this point. Because it’s such an easy win for them if they do and everything’s kosher