Philosophical question for some about publicly tradded exchnafges vs private

LeGaulois

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Continuing the discussion from here, so sorry for the bump

There are 2 sides to consider.

If someone invested in a company, it is always wise to know the financial situation, etc of the company. And not only "here are the dividends of the year". It helps to make a decision (to leave or not)

Now, as a customer (if I was one of them), I don't think it's something I would care. If the company makes fewer incomes it's not my business. What matter to me is my money and nothing else. Now if the company is bankrupt, getting hacked, or whatever event. I would hope to be enough sooner alerted to move my coins out of the system.

So more confident, not really to me...

Need to be said, nowadays Coinbase is a very solid company, and as much as going out of business and/or the need to use the coins owned by people is close to nothing.
The statement about the fact that the company could use people's coins in case of bankruptcy. Coinbase had no choice since it was to follow the SEC. (as i was saying in the other thread)

Quote

Perhaps in May, they have included a "new risk factor" but it's because of a new requirement from the SEC which is needed for public companies that hold crypto assets

PrimeNumber7

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I would say that a publicly-traded exchange would provide an additional incremental amount of confidence, assuming they are not insolvent, or near insolvency.

I think the risk to exchange customers is not necessarily the financial health of the exchange, but rather the exchange getting hacked, and being unable to payout the customer deposits. Obviously, the risk of an exchange getting "hacked" (with quotations) is lower for a public exchange rather than a private exchange. Public exchanges may also may also more thoroughly test their security procedures than a private exchange.

DaveF

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1) Humor: What the heck? Did auto-correct on my machine stop working when I posted this. Just saw the misspellings in the subject.....

2) Serious: Although I don't use exchanges often I feel 'safer' in a regulated exchange that is not a public company. They don't have to do some funky things to make the numbers for the quarter or year or whatever. It's just my feelings; has no real basis in fact. But I could see someone who works for Coinbase or similar doing something monumentally stupid if they were going to have 2 massive bad quarters back to back. Change this amount here, make theses reserves look like this and poof....no loss for this period. And then is snowballs and you never catch up. For those of you who were around at the time remember miniscribe https://www.youtube.com/watch?v=OWwzQyXAvXI

-Dave

ABCbits

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Honestly i don't care whether an CEX is public or private company. I would use different metric such as their fee or how likely they bother their customer to "verify" their identity, deposit or withdraw. Besides, there are ways to make your financial reports looks good (e.g. selling asset).

The Sceptical Chymist

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As far as security of my money is concerned and an exchange like Coinbase or Gemini pulling a Cryptsy, I wouldn't give it a second thought--even if their financials are poor or even undisclosed. Both of those exchanges are regulated by the US government, so if either one were to find themselves in a position where their business model is no longer viable, they'd just shut down, but I don't think any of their customers' money would be at risk.

I haven't read much about why Coinbase had such a poor quarter, and I don't quite understand why that is. Even if bitcoin's price declined substantially, they're basically like any other broker: they make their money through fees paid by their customers, no? And even if trading volume nosedived, they still should be making a profit....unless their company is too bloated, meaning they have too many employees and too much overhead. Since they don't have physical branches like most stock brokerages do, I'm not sure how big their operation needs to be.

In any case, no, an exchange's financials don't concern me one bit.

bitmover

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Quote from: DaveF on May 14, 2022, 05:16:33 PM

Do you think you are more comfortable using a publicly listed exchange like Coinbase where you know somewhat how they are doing financially or a privately held one like Gemini where if there are financial issues you may not know untill it's too late? Now let me be clear I am NOT saying there is an issue with Gemini, I think they are solid financially. Just using them as example, because well, we don't know.

I don't think that a public company is anyway safer for me.
It could be even worse, as they have to comply with more regulatory standards than privately held companies.

When I deal with any exchange, I am worried about just one thing: sending the money/btc in and out as fast as possible.

Let's suppose I send some bitcoin to Coinbase. I just want to sell it as fast as possible when it gets its 6th confirmation.

My greatest "fear" is that Coinbase decide to take a look at my address history and find some casino/mixer/whatever and they decide to complain about it, because some regulation may force them to. Or if they think "you have too many BTC for your profile. Let's ask for more KYC information before releasing your funds"

I believe that privately held companies may not have so many regulations to apply to.

Despairo

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Do you think the other centralized exchanges wouldn't do same like Coinbase do (using clients funds to cover their loss) ? I doubt it, even so called SAFU exchange will do same. We are know they can revise and update their TOS everytime they want right? if we didn't find the rule they will use our funds to cover their loss, they might adding that's rule when their SAFU can't cover their loss.

Either it's transparent/public centralized exchanges or private centralized exchanges, in the end it's still a centralized exchanges with the same ridiculous rules.

Darker45

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Whether an exchange is publicly listed or not might not matter to me at all. But it, of course, matters that the exchange is transparent. However, it is not the only factor also. If another platform that is not as transparent, but doesn't have a very dirty reputation either, provides more convenience, then I think it is possible that I will use it instead. But this is also depending on the amount of transaction involved. If it is a really huge amount, I would forget about convenience and stick to the more transparent platform. To a certain extent, transparency means safety.

hugeblack

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If you are a person who wants to exchange cryptos, the time you deal with the platform is relatively short, as most of us are depositing, transferring and withdrawing, and therefore it will not make a difference between publicly traded exchanges vs private.

For traders who speculate in the price, they leave their coins for a longer period in the platform, and thus the risk of confiscation increases or problems occur. Therefore, publicly traded platforms are better, as their shares in the stock exchange and the nature of their investments will make it difficult to wake up and find that everything has completely disappeared, as happen with some private exchanges.

SFR10

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Quote from: DaveF on May 14, 2022, 05:16:33 PM

Do you think you are more comfortable using a publicly listed exchange like Coinbase where you know somewhat how they are doing financially or a privately held one like Gemini where if there are financial issues you may not know untill it's too late?

Personally, I'd go with the one that provides some transparency in its operations ^[former], as opposed to the latter that doesn't give its users enough leeway to act in certain situations.

dkbit98

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Quote from: DaveF on May 14, 2022, 05:16:33 PM

Do you think you are more comfortable using a publicly listed exchange like Coinbase where you know somewhat how they are doing financially or a privately held one like Gemini where if there are financial issues you may not know untill it's too late?

I don't care if they are publicly listed or not, but I would never keep any coins on that exchange long term and use it as a non-custodial wallet.
They recently published a document stating they can take all coins from your account to cover their loses... this is probably worse than banks are doing.
Using Coinbase or any other centralized exchanges for getting quick cash is fine, but I can do all that P2P without being controlled or watched by anyone, and nobody can freeze my coins this way.

Rikafip

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Quote from: DaveF on May 14, 2022, 05:16:33 PM

Do you think you are more comfortable using a publicly listed exchange like Coinbase where you know somewhat how they are doing financially or a privately held one like Gemini where if there are financial issues you may not know untill it's too late? Now let me be clear I am NOT saying there is an issue with Gemini, I think they are solid financially. Just using them as example, because well, we don't know.

I don't think that would matter to me at all, whether exchange is publicly listed or not. Then again, if I absolutely have to use centralized exchange to buy bitcoin (which so far i never did), I would probably chose Coinbase over any other exchange, including Gemini/Binance.

DaveF

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Philosophical question:

Since there seems to be a lot of discussion about the massive loss that Coinbase had last quarter.

Assuming you are going to use a regulated KYC exchange because it's easier and you just don't care. Send them money get your BTC and done. No dealing with unknown users and other things like on LocalCryptos or whatever.

Do you think you are more comfortable using a publicly listed exchange like Coinbase where you know somewhat how they are doing financially or a privately held one like Gemini where if there are financial issues you may not know untill it's too late? Now let me be clear I am NOT saying there is an issue with Gemini, I think they are solid financially. Just using them as example, because well, we don't know.

Eliminate all the Conbase is bad stuff, just think about the security of your fiat while you are exchanging it and getting you BTC or exchanging your fiat to BTC.
No matter what you have to trust them to a certain extent.

Just wondering what other people are thinking.

-Dave

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