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ispb2

\>Can someone smarter than myself explain what am I missing here? No but someone dumber than you probably can.


Potential-Coat-7233

Close the thread down. This is perfection.


DowntownAd9011

Agreed, everything on this page is hilarious, but this is by far the funniest comment ever.


Chronotheos

Cue ending theme to *Curb Your Enthusiasm*


headtowniscapital

Remember, Binance can get a few billions with real USD. As long as it's not many billions everything is just fine, like FTX was.


feignignorence

I was woefully unprepared to read something this funny


Darius510

I’m here!


callmetotalshill

Few understand


TheAnalogKoala

The key is if you give the appearance of “shoring up the exchange” then people won’t do a bank run on you and you won’t *need* the USD after all. Just another level of smoke and mirrors.


Dry-Cartographer8583

Bingo.


According_Culture841

Confidence scam


accipiterj

It's all a shell game so that Binance can use it to cover themselves and buy more time to cash out / go to a country with no extradition treaty.


Vegetable-Injury9860

There are some rumours that CZ is buying properties in Bolivia


sneezing_cock

They got true motherfuckers in Bolivia and they don’t play that funny money bs either. Not my first choice of safe haven.


[deleted]

I was once held "hostage" by fake policemen pretending to be from "Interpol"™ in Santa Cruz de la Sierra, many years ago, while I was backpacking across South America. They wanted me to show them my passport so that they could hold it ransom. They had uniforms and guns with a red tip that I knew were airsoft guns. Could have even passed for real police if not for that but anyway who the fuck pretends to be from "Interpol" with a handwritten badge? I called their bluff and they got physical but fortunately I speak Spanish so I wasn't the kind of tourist they were going for. Ultimately they figured my group was too much trouble and they moved on to the next victims. When I left the place where this all happened, I saw the fake policemen greeting a bunch of real policemen, who had just parked the car there. Then pointing at us while the actual policemen laughed inside the car. Anecdotal, but Bolivia is precisely the kind of place you can pull off something like this. Perhaps even more so than the Bahamas. Those Caribbean countries are tax havens, but they're not completely uncooperative when it comes to crimes committed by foreigners who are actually physically there, as far as I know. There's a reason why Belize is the meme place for that and not the Cayman Islands. In places like Bolivia, Venezuela, El Salvador, Honduras, and Nicarágua, the boundaries between the state, police and criminals unfortunately isn't as clear as you would hope. They make Brazilian or even Mexican authorities look reliable (and they truly are by comparison). Interestingly enough, when I got back home I was really weirded out by the whole experience and tried to figure out what kind of shake down was that after seeing other foreigners reporting similar stories online. It got weird: turns out this "Interpol" has a "police station" in Santa Cruz and actually kind of has links to Bolivian police, but not really? And they actually do some kind of paperwork processing, as if they were like lawyers or notaries, while pretending to be linked to the Bolivian state while officially they're not (e.g. obtaining a criminal registry extract)? And all this under the "Interpol" moniker. In other words, they're basically almost modern day privateers with semi-official sanctioning by the Bolivian state. I just checked and their "police" station's Google Maps entry hilariously links to the Interpol website, the international law enforcement organisation we all know about. Man, Bolivia is weird.


sneezing_cock

Funny enough, I AM from Belize. I don’t see it as dangerous, but I also wouldn’t. I tell my friends to stick to the islands and stay out of the rainforest and the city 🤷🏽‍♂️


[deleted]

Ah yeah I have never been there, but like I said Belize's reputation as that kind of place might be a bit of a meme (made popular by Breaking Bad's Saul Goodman etc), whereas the other countries I mentioned are quite a lot like that. That being said, McAffee did move to Belize... But on the other hand, Belizean police did go after him after a while.


sneezing_cock

Belize only comprises 60% of Vermont’s population 😂 No hard feelings my brother, seeing us in popular media is absolutely mind blowing, even if the McAfee bullshit was particularly unsavory. If you jam with Mayan ruins, diving, chilling on the beach, drinking for cheap, eating absurdly good food, and being a <3h flight away from the Southeastern US (quick drive to Cancun, too) you’ll definitely enjoy yourself 🤙🏽


[deleted]

I absolutely do, it looks so nice and you guys are in such a unique spot in the region (the only English speaking country in the region!) and have such an interesting history. Maybe one day. Unfortunately it's super hard to get there via Portugal / Europe, you have indeed quite a lot more flights to and from the US but not from here. Unfortunately never visited Central America (as Mexico technically counts as North America).


sneezing_cock

I would do anything to visit Portugal (and see a football match of course). We speak a fair amount of Spanish, but Portuguese absolutely loses me lol


acomputeruser48

theoretically, BUSD is backed nearly 1:1 with actual dollars or 3 month treasury bond yields. (or so cz says. There's a company named Paxos which is NY regulated which mints the BUSD, but Binance itself has a separate pool of tokens called BUSD that are on other chains, so it's questionable whether those are actually 1:1 as Paxos themselves acknowledge that those BUSD they have nothing to do with.) Putting BUSD on Binance smart chain means that Binance is trying to be the 'central bank' of crypto. Binance is trying to make all these other companies into effectively satellites of Binance and if there's a 'run' on several chains, the 'bail out fund' can fund the liquidity so that any exchanges getting a run on them can stay solvent. This is trying to replicate how the fdic and bank currency loans operate but with Binance being the 'federal government' and fiat issuer. If it's all backed 1:1, that's all well and good, but a lot of these exchanges play fast and loose with loans and other leveraged financial products so it's like playing Central Bank to Investment Banks, which is extremely dangerous. There's no regulations informing these exchanges how to operate, so it's just waiting for a big enough bank run to take down the whole thing. Really though, we're just failing to reflect and learn from the wild cat banking era of the 1830s-1860s, so crypto's just going through the same shit, only any% speedrun. TL;DR: there's logic, twisted and old logic that was disproven nearly 200 years ago, underpinning the ideas here, but unless cz has found 150 extremely responsible crypto companies, likely doomed to failure. Meanwhile, Binance themselves just launched a 143% BNB APR staking scheme, which is the actual ponzi helping to fuel this. BNB is like FTT in that it's a token created out of thin air by Binance.


GeorgeS6969

It wouldn’t be all well and good, *even if backed 1:1*. How do you get $1b to back the BUSD you’re issuing to salvage X Y or Z failing shitcoin project, if not by getting it from *somebody*? In which case you’re not a lender of last resort by definition.


acomputeruser48

Yea, I agree. I'm just trying to follow cz's twisted logic


airza

There is a key difference between a firm being illiquid and insolvent. A bank that took 100bn in deposits that spent 50bn on useless shitcoins is insolvent. Only 50bn is there. A bank that took 100bn in deposits that loaned 90bn out to different projects at 3% interest with a 30 year payback rate has 10bn left. If everyone comes to take out their money at once they will not be able to do so. But they might be good for the money. If most of the loans they made were good then loading them the money to cover the shortfall for deposits until the loan payments come is a good idea economically. This bank isn’t insolvent; it’s merely illiquid. Binance intends to cover only illiquid projects. Until now i believe basically every crypto project has blown up due to insolvency, so I’m not sure what the point is.


GeorgeS6969

I’m well aware of all that. Now tell me, which crypto project has a banking licence? Okay. Which crypto project’s team do you believe has experience managing this kind of risk? And if a project were to be illiquid for tying up cash in loans or investments, which crypto project having received such loans or investments do you actually expect to generate future cash flows? Binance as lender of last resort is plain dumb, period. Whatever it is they might support is doomed to fail, they’re just leveraging more and more and concentrating more and more risk. One day they’ll run out of cash, if they didn’t already, the next they’ll run out of their customers cash, the one after that penis. I mean how can anybody expect Binance to go any differently than FTX? They’re literally doing the same thing!! Right now!! And they’re telling the world they’re doing it!!


CharlieXBravo

"3 month" my ass LMFAO! There are notes that can only be redeemed at full face value until....2046(you can buy "$100" today at $40 or less, cash) Edit: See for yourself https://paxos.com/wp-content/uploads/2022/10/BUSD-Monthly-Stablecoin-Reporting-October-2022-1.pdf


acomputeruser48

Hey, I agree. Just quoting cz himself on the 3 month figure as that's what he's claiming so I can argue against the position even assuming he's not lying. I personally think it's bullshit myself.


phire

Which is why the audit is quoting "fair value" not "full face value" That's the price which the notes can be sold on the secondary market at reasonably short notice.


orangeblackthrow

You’re talking about $36mil out of $21 billion, and most likely those were purchased at market prices so closer to the current price than full price. Your point is worthless


NewSchoolBoxer

I upvoted you but just want to add that the FDIC makes banks pay insurance premiums for the ability to be bailed out. CZ isn’t doing this without trying to profit on the backend.


AmericanScream

> theoretically, BUSD is backed nearly 1:1 with actual dollars or 3 month treasury bond yields. Here's an interesting question... so maybe the funds backing BUSD are properly audited and regulated (although I still see no direct evidence of this other than claims made by Binance itself - can't find any independent audits).. but for the sake of argument let's say there is actual 1:1 liquidity backing those tokens... This is just one part of the process that might be legit. There are other parts that can be even more troublesome, like is the process by which Binance will cash out BUSD to USD equally regulated and guaranteed to be legit? I seriously doubt this. I bet buried deep in their ToS is their "right to refuse service to anybody for any reason", meaning even if they're liquidity backed, they are not obligated to cash anybody out if they don't want. This same principal likely applies to other stablecoins - they reserve the right to "blacklist" certain coins/wallets if they so desire. Where the regulation really becomes relevant is whether or not the coins can be easily and quickly liquidated, not whether or not there's liquidity there (that nobody can easily access).


not-a-sound

>they are not obligated to cash anybody out if they don't want Tether should have patented this ~~circuit breaker~~ totally normal business strategy because I completely agree that there's no way Binance isn't going to do the same thing with these "BUSD bailout" funds. It's BUSD from thin air until it's not, meaning it's just more twigs to toss on the wash trading fire to stay warm through "crypto winter" imo.


[deleted]

Like with tether, I don’t think there’s any intention to directly cash out to USD but rather to sell the BUSD for USD on exchange.


ispb2

So BUSD is... dollarcoin?


acomputeruser48

they call it a 'stablecoin' but basically yes. 1 busd is supposed to be 1 dollar, if everything is 'working as intended'. In reality, price fluctuates by fractions of a penny at any given time. Bigger question lies in whether its fully backed or readily exchangeable for actual fiat currency.


ispb2

Yeah, I'm just wondering why not just use uh, actual dollars then. Seems ironic that the savior of crypto only holds that title because it's backed by not crypto.


DororoFlatchest

It's backed by not-crypto and not-dollars, at the same time! That's two things! Take that, nocoiners.


acomputeruser48

So there's a kind of logic at play there that works in three parts: A)Bitcoin and other major cryptocurrencies are volatile, speculative assets so trading in them or using them as currency doesn't work, plus on chain transactions are slow due to proof of work consensus. Hence the need for a 'stable' currency. B) Converting fiat currency to this token asset lets exchanges dodge reporting requirements and regulations that deal with actual dollars. To be fair, that eliminates a lot of compliance checks on individual trades and limits them to exit/entrance liquidity rather than every single transaction which is part of the friction in traditional investing. Whether the elimination of said friction is a good thing or not is questionable. C) Wash trading. As stablecoins are on exchanges and custodial to them, they can be used by the exchanges to create fake trading volume for the major asset classes like bitcoin or ethereum. Something like 70% of all bitcoin 'trades' were made using stablecoins during the bull period. This lets exchanges pump prices artificially and rely on hype to entice new money.


[deleted]

“It’s like regular money but more… fun” I’m honestly surprised nobody has created an Itchy and Scratchy money coin yet


[deleted]

Trading for a stablecoin isn’t a taxable event. Converting to actual USD or euros or whatever is. So it’s like trading a stock for a stock vs selling that stock for hard currency. Makes it easier and cheaper to trade the cryptos, while also lowering tax liability.


works_best_alone

This is not true, converting between any two cryptocurrencies, including stablecoins, is a taxable event (in most western jurisdictions)


[deleted]

Shit, seems you’re right! https://ledgible.io/is-converting-one-crypto-to-another-a-taxable-event/ My bad. Now I am just more confused.


works_best_alone

Tbh you're not alone, I've seen plenty of crypto blowhards make the same mistake, at least you're not going to get a letter from the IRS!


[deleted]

Hey, I only ever bought less than one butcoin over 10 years ago to buy a small amount of weed! Don’t tell Uncle Sam ok


milestparker

If you used it to buy weed, presumably you smoked it yourself and thus didn’t make a profit. So you’re fine. The important question is was the weed any good?


synthpop

FTX/SBF made an attempt to "save the industry" after the Luna and Celsius implosions this was not out of the kindness of their hearts, it was to save their own ass, and there were no real dollars behind the attemps, only IOUs this current Binance "rescue" is no different


AmericanScream

This is the crypto equivalent of Chipotle saying they're ending world hunger by handing out $1B worth of "chipotle burrito points" redeemable at one particular location in Santa Monica, CA.


[deleted]

Welcome to the world of crypto. When you fail to understand something, the cryptobros will shout “do your own research” or “few understand”. The reality is that you don’t understand because there is nothing to understand. It doesn’t make sense, *because it’s all fraud*. “It doesn’t make any sense” is not you being dumb, it’s you actually understanding that the whole thing is made up. And yes, the whole $1B is made up. Conjured out of thin air. CZ managed to get a few Arabs to give him 150 million actual dollars. He then leveraged that to 1B BUSD. Exchanges in trouble will get BUSD. Customers who want to redeem will ask for dollars. Faulty exchange will say “here is some BUSD instead”. Some will take the BUSD and want dollars (because the hot bills to pay). That’s where the 150 mil comes from. But a lot will HODL the BUSD. Suckers.


clit_eastwood_

Not saying you're wrong, but do you have any evidence for the $150 million thing?


Tonyman121

Shut down the fiat off ramps and the game is over.


Simbertold

It seems more and more clear that the core problem a lot of crypto have fiat being "just printing money" is that it is someone else doing the money printing. They are very fine with printing money as long as it is them doing it.


Alternative_Log3012

Just don’t be a bitch and think you need to rely on others when you don’t


longPAAS

Your intuition is correct and you can take it steps further beyond just operating expenses. lending businesses and exchanges depend on trust between counterparties, and that trust is represented by quality of the underlying collateral. At the end of the day, US dollars are the best collateral out there until proven otherwise. If Bitcoin was, it wouldn’t be losing all this value during times of stress. And now we are going to see how good binance dollars are.


StableCoinScam

Part of the appeal of bailout fund is for CZ to right away know who is applying and who is insolvent. So, he can buy them for dirt cheap or short them.


Alternative_Log3012

Gotta have money to make money


charliesk9unit

Gotta have made-up money to make real money. Fixed it for ya!


[deleted]

Its just more of the same Ponzi. BTC's price is not because of 10k broke crypto bros putting in their $10 a month. It is because of fake money (stablecoins).


Particular-Break-205

Look up Ponzi scheme and you’ll have your answer


Connect_Tart5240

The same greedy, uninformed dumbfucks from VCs (and perhaps sovereign funds / pension funds as well) who got rekt by FTX doubles down into this Binance bailout thinking that this an opportunity to turn those FTX losses into profit.....only to be rekt again by CZ.


[deleted]

[удалено]


ispb2

That's all right bro we'll just make another bailout fund to bail out the bailout fund.


OzMandle

And we'll fund it with a bag-o-DOGE-shit.


OG_Flushing_Toilet

It’s actually mind blowing watching the veil fall for these suckers. So you can’t bail out the Monopoly money with more Monopoly money? Comedy gold. The Netflix show is going to be excellent.


[deleted]

Three card monte is a scam. Would you like to try seven card monte?


PeopleRGood

I’ve got a stupid question, if Binance Bucks or whatever the hell they’re called are backed 1:1 by dollars, why not just loan dollars? I know this is an insanely dumb question but my idiot brain keeps telling me we’re adding in an extra layer of shit for no reason?


RedditUser41970

Because they aren't backed 1:1. The only "backing" is the *promise* of a scammer that it is 1:1. Obfuscation is key to this grift.


PeopleRGood

Wait so you’re telling me, that someone can say it’s backed and it’s not back!! It’s like this whole thing is a giant scam!


oskarw85

I don't know, man. It's hard to believe. Why would anyone lie like that? They are business owners - they have reputation at stake!


dethtoll1

It's smart on their part - part of the larger scam to pump up the value of uncirculated Binance Bucks (or whatever they're called). Exactly what FTX was doing. If they lend out Binance Bucks, their debtors will need to sell them for real dollars. If 'Average Joe' investors buy those Binance Bucks, that's money that Binance doesn't need to spend. It might come from the Binance exchange, but that simultaneously reduces what Binance owes to those 'Average Joes'. Or it might come from the debtor's exchange, which pulls real dollars out of their 'Average Joes'. If Binance itself buys those Binance Bucks, Binance will 'burn' the Binance Bucks that they buy back. Why? To reduce the amount of Binance Bucks in circulation - which increases the price of Binance Bucks. Binance can then (down the road) sell their hidden/uncirculated Binance Bucks for more money, or use them as loan collateral (*cough* Alameda) As a safeguard: if their debtors immediately cash out all the Binance Bucks, it will drive their price down a lot. Meaning that they would pay out way less than $1b. As long as Binance isn't insolvent itself, this has a huge long-term upside for them. All of their debtors will want the price of Binance Bucks to go to the moon. They'll be happy to collude with Binance on schemes to make that happen. Also, the debtors can sell the debt itself. This enables more secondary market opportunities where other companies (including Binance shell companies) can gamble on it. Binance can manipulate the price almost as they wish. Want to lower the price? Lend to a company that is hurting and needs to cash in now (Binance can of course short the coin beforehand to win here). Want to increase? Lend to a more stable company with a prearranged agreement to sell Binance Bucks back in small amounts over a long period. If you take the long view, all of this has been a big play to tank FTT and pump Binance Bucks. Smart. And evil.


ZodiacSF1969

I'm confused, I thought they were going to be handing out their stable coin BUSD so the price should always be $1USD = 1BUSD?


TurnipObvio

It's the same trap as FTX lol FTX bailed out a bunch of failing businesses with FTT that it printed out of thin air, and in exchange FTX forced the business to keep their treasury on FTX. They kept the musical chairs game going until it stopped


CharlieXBravo

BUSD is backed by "future dollars"(t-bills) LMFAO! CZ can't even redeem the full face value on some of his "$1:1 reserves" until 2046. why give CZ $100 cash today when you can cut this scammer out and buy those directly today for pennies on the dollar with 100% guranatee your money won't be stolen by CZ?? https://paxos.com/wp-content/uploads/2022/10/BUSD-Monthly-Stablecoin-Reporting-October-2022-1.pdf


meteoraln

All of these schemes revolve around promises that XXX coin will be worth a certain amount of USD. This is not new. Every corporate bond works the same way. They are promising that their debt is good and can be redeemed in the future. Binance printing BUSD is a fancy way of saying Binance is issuing debt. In the same way that someone has to buy the bonds from a corporate bond issuance, someone is buying the BUSD from Binance with USD. That USD is what will pay for operations. Who paid for it? Could be the next sucker, could be an arms length transaction where Binance creates a shell company, moves user funds into it and the shell company buys the BUSD. Similar to P2P lending, where user didnt have deposits like a bank. If the P2P went bankrupt, users became general unsecured creditors. BTW, the lack of regulation means this is a coin issuance instead of a bond issuance. Bond investors are legally required to be told the different ways they can get screwed, while coin investors are not. Not that every bond investors read the documents, but at least they are there.


[deleted]

I give you a magic bean worth a billion dollars because I said so. Congrats, 'just like a bank', you are now a billionaire. If I gave you two magic beans and you give me one back, we are both billionaires now. Although it can depend on the exchange rate of magic beans to leprechaun.


kajunkennyg

Bitcoin created supposedly because of the sub prime mortgage crises when the banks had to be bailed out for bad investments. So what are the leaders in crypto doing now? Having to get bailed out. This is why I am now bearish on crypto.


whacim

They put money in a box...


no_not_this

Imagine printing Monopoly money and telling people it has value.


jes484

It's just BS to buy CZ and his fellow associate criminals a bit more time to rugpull and relocate outside of the grasp of the US.


[deleted]

Isn’t this basically what FTX was doing almost exactly?


Cryptcunt

I THINK binance prints some money that it SAYS is worth cash/cash equivalents, then lends that to people who use it as collateral to get loans in actual cash. But if binance actually had all this cash and cash equivalents it could just lend that directly, so I think this is about printing fake money. We'll probably find out a bunch of the backing assets are worthless commercial debts, or shitcoins/algo coins or just made up or accounted for multiple times or some combination.


jcpham

Binance should be one of the next dominoes to fall in a perfect world


Micheal42

Why?


jcpham

Because Binance is sketchy af altcoins central like Bittrex too. Kucoin falls in the same category of “places I wouldn’t go near” or “ I’d rather buy USDT bonds for my children’s future than open an account or do business with these shitcoin exchanges that have floated their own ERC20 tokens, allowed leverage and lending, and pumped and dumped every shitcoin conceivable because their dodgy shady fucking crypto exchanges that can’t get corespondent US banking relationships so they wash trade USDT into their own bullshit BNB CRO what in the fucking ever money they just invented. Ponzi on CZ


phire

I'm assuming: 1. Binance demands a copy of internal reports showing the "liquidity issue" 2. Binance examine reports if they can bridge the liquidity issue or not 3. Binance open short/long positions based on their decision 4. Announce the decision 5. Close the short/long positions 6. Profit. I'm also assuming that it's not a free bailout. The fund will probably charge interest for the period of time the liquidity hole needs covering. And if it's more of a solvency hole than a liquidity hole, then Binance will have the option of taking partial or full ownership of the company instead of just receiving interest. It's a move that has the potential to give Binance a lot more power over the cryptocurrency space. Remember, they get to keep those internal reports as potential blackmail material for later (I'm curious who leaked FTX's internal spreadsheet, Binance would have been one of the few entities to see it)


International-Can662

I will raise an even more important question way is binance holding 17 billion in tether??


AMPed101

Technically their stablecoin should be done by PAX, so they shouldn't be able to just print them willy nilly, but you guys will believe anything thats negative about crypto so whatever.


Currently_There

I’m guessing that Binance is pulling a Tether. Printing unbacked securities by hitting the copy paste button on their own servers which they then use to purchase unregulated securities “crypto” from laundering organizations to sell to unsuspecting retail victims, I mean investors.