Topic: Proof of reserves? Insurance fund? Best I can do is a random number generator! - page 2. (Read 804 times)

People like CZ, who believe that 99% of funds in self custody would be lost, and that funds are only #SaFu when you store them with Binance. Take note that nothing should serve as a guarantee that any centralized exchange is safe, nothing at all. Centralized exchanges do business through fractional reserve scam, they take your money and try to use it to make more money for themselves, and how can you know how much they have, and if it is enough to cover liabilities, either way you have to trust what they say, and you shouldn't. Store your funds only in a self custodial wallet.
They can print their tokens just out of thin air, so they rather use your money to either trade or gamble in other investments and see how much profit they can make from it, and if they fail and become insolvent, they print out millions of their tokens out of thin air and try to use it to stay afloat. By the way, why should you be worried about what centralized exchanges do, when you can store your funds the right way.

How will you know the people who run these centralised exchanges? Before the fall of FTX  Sam Bankman-Fried was seen as a financial titan and a well-celebrated philanthropist. Almost all the media houses were singing his praise and FTX was seen as a successful business as they splashed millions on endorsement deals and marketing. Nobody knew that the company was a walking corpse until it collapsed. The operations of most of these exchanges are secret and their audit statements are fake and fabricated. You cannot dictate how much they own because they can always randomly generate figures without any verifiable proof. The best option will always be to "stay away from centralization"       

I agree with you. Proof of reserves is a good step, but it's not enough to guarantee that a centralized exchange is safe. There are other things to consider, like the people who run the exchange, how they do business, and how much money they have.

I'm also worried that many centralized exchanges keep their insurance funds in their own tokens. This is a conflict of interest, because it gives the exchange an incentive to manipulate the price of its token.

Some new absolute hilarity from the trial, this time involving BlockFi, which lost $1 billion in the FTX collapse and ended up collapsing themselves. Zac Prince was the CEO of BlockFi (emphasis added):

It's worse than that - we know for a fact that Tether doesn't have the assets it claims to have. They revealed in court that at one point only 14% of USDT was actually collateralized: https://bitcointalksearch.org/topic/m.56656992. They also admitted that their collateral includes loan repayments they are making to themselves after printing almost $1 billion USDT out of nothing and loaning it to themselves to stop themselves going bankrupt. So print USDT out of thin air, loan it to yourself, claim USDT is backed up by future loan repayments.

This is indeed an eye-opener never to rely on these exchanges no matter how influential or renowned they claim to be. This issue is like mismanaging funds somebody put in your custody. And when he requests his funds, you tell him not to worry that you have another currency. And you go to your room and bring out some coloured papers and tell him that you will pay him with this. You still go ahead to convince him that in a few months, these coloured papers will be worth more than the dollars. Sadly many people still believe these lies and invest in these shitcoin.     

There is nothing stable about the USDT. How are we sure that Tether has the assets or reserve it claims it owns? Just like FTX the shady deals engaged by these centralised firms always come to light after it has collapsed. 

Still, people consider USDT trustworthy, it's all the game of valuation, there is a need for the realization that the value we need is not a stable currency it is Bitcoin. I'm afraid until we are gonna learn there will be another.




This is the hit I'm talking about, non-custodial holdings are the only solution to avoid it but it's a hard job to educate people for the possible outcomes. SAFU is not a sign of reliability, it point out something better to make an exit.

Exactly. It's happened many times before. An exchanges goes bankrupt because of their own shady practices or because of a hack, so they either launch a shitcoin and "pay" back their users in this worthless shitcoin instead of bitcoin, or they just print a few hundred million of an existing shitcoin out of nothing to keep themselves solvent. A prime example of this is Bitfinex and Tether, where they printed almost a billion USDT out of nothing and gave it to themselves after they were hacked and insolvent.

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My most recent favorite snippet from the trial below. Gary Wang was a the CTO of FTX and co-founder alongside SBF:

What an absolute clown show.

If this mishap is really based on truth, then the cover of this disaster, i.e., Binance Bankrupt, will be beyond imagination. Why are 150 million people connected to Binance with their assets? If Binance shuts down or goes bankrupt, it may cause a sell-off panic in the cryptocurrency market due to the sell-off in the prices of bitcoin and other coins. A reduction can be seen that has not been recorded in history. Obviously, Binance is the world's top exchange, and Binance has allowed small exchanges and institutional investors to collateralize crypto assets, so if something happens to Binance, these small exchanges will also be required before Binance can cause panic in the market.

In the end, let me know by adding that I don't know that these people are curious to dig their funds on the one hand, and on the other hand, they are depending on them by giving their funds assets to the exchanges. Although exchanges do not give you a complete guarantee and security of your funds, when a self-custody (hardware wallet) supports you with all these associated limitations, what is the need to give authority to exchanges?

Therefore, the purpose of speaking was to keep the fund in hardware wallets and not give so much importance to exchanges; no matter how big the exchange is, it should not be kept safe to keep its assets. You should take steps yourself instead of depending on others.

I was not following this trial, as I am not affected by FTX exchange, I had no funds on it, but some of our local community members do have like underdress. He has a decent amount on FTX. And we all were hoping good for it. But as I said, I had no funds, so I did not take an interest in it when I should have.

Well, thanks for this post, as now I get to know what is happening there, and I am really shocked to see that, how they are making fools of nontechnical people who do not know the difference between code and can not audit the whole reports, as they do not aware of he programming languages. But thanks to the developers who brought such differences in front of us.

We should really avoid centralized exchanges, no matter what, how much we are dependent on them, we should prefer a non custodial wallet not custodial.

If i may, why should you be contacting someone, if your BTC isn't in your self custody, then immediately move it to a self custodial wallet, Electrum, Sparrow, BlueWallet are all good options for you to choose from.
Do they even have to borrow money, they could just print their shit tokens out of this air and use it to buy assets to 'prove' that their reserves covers all liabilities.
Binance may be a 'big' exchange, but they are just as shady as many other centralized exchanges, with their fractional reserve and proof of reserve scam. Proof of reserve would never make sense because the exchange can do anything to balance their books and make everything good, they can show us proof of reserves without us knowing what their full liabilities are, and even if they show the liabilities, we can't be sure if it is true.

I was expected to see such sort of bullshit by the centralized platforms but I wasn't expecting it to be the same in the case with the reputed ones anyhow they completely lost it years ago.

They just mean bussnies at any cost, I'm sure such sort of shity approach is gonna slip out from the other top exchanges as well, simply they can do anything in their territory which is close sources. CZ is smart but in the current timeline, Biannce seems to be the second most suspicious one doing this but somehow they are surviving. But I took exit a long time ago.

 ☑ Mt. Gox (2014)
 ☑ Bitfinex (2016):
 ☑ QuadrigaCX (2019)

#not_your_key_not_your_coins


Crypto exchanges need transparency, as opacity is as outdated as beepers and dial-up internet.

I am not surprised to hear this, because some other people have also seen it that exchanges goes as far as borrowing funds before audit and return the funds after audit to deceive people that they have enough prove of reserve.

Binance last audit was not accepted by people because they said there is no transparency in their PoR. If Binance the biggest exchange can do this then other smaller exchanges will learn and copy from them.
https://www.ccn.com/news/binance-proof-of-reserves-transparency-not-enough/#:~:text=In%20the%20latest%20snapshot%20%2C%20Binance,users%20hold%20in%20their%20accounts

o_e_l_e_o shows an image to reinforce that holding funds on an exchange is not a solution. The image displayed here belongs to FTX, it cannot be denied that other exchanges can also be like that.

You, I and most of the others probably don't have the advantage regarding programming knowledge and don't really know the language of each code that appears as in the image that appears above so we can assume that a large exchange like Binance doesn't make us afraid to save funds. on the exchange, but people who have knowledge of programming when they see this feel afraid of the coins that have been stored on the exchange.

Regardless, the business practices carried out by exchanges such as FTX or other exchanges are manipulative. Basically, exchanges cannot be trusted to store money.

Nice find, but I'm not surprised at all by the audacity of these wealthy suits and ties. I'd actually be offended if they didn't meet my low expectations of them.

You give them too much credit, they at least would have shown a tinier bit more effort if they actually ran a code to randomise some arbitrary number in a less arbitrary range...

You know those print cmd stries are a staple of memelogy, you don't know they're used at the highest level.

It is predictable that centralized exchanges like FTX employ manipulative business practices. They are a business and all they think about is how to make a profit without needing to think about their users. I think that it is not just FTX, certainly other centralized exchanges carry out manipulative practices like this and because they are still operating it is not visible to external parties.

I have a bit of knowledge in programming so I giggled a bit, they just did a complicated print command. Seriously though, I am scared right now for my bitcoins because they're not in a non-custodial wallet and I think that this will be the final straw, I'll be contacting someone.

Binance have already been caught running a fractional reserve system and not holding enough coins to cover all withdrawals: https://bitcointalksearch.org/topic/m.62531977.

Even then, it proves nothing. So let's say Binance "prove" they have 500,000 BTC. How do we know that is everything they are supposed to have? How do we know that covers all customer deposits to Binance? We don't. It doesn't matter if they prove they are holding 500,000 BTC, if collectively all Binance users should be able to withdraw 750,000 BTC. Proof of reserves without proof of assets is meaningless.

Various exchanges have tried to do proof of assets as well, but it is completely trivial to fool by just having a handful of accounts with negative balances, which is exactly what FTX were doing as well. Alameda's account on FTX had a balance of negative $8 billion.

Binance did the same, with a few billion in USDT being moved out the day after their so-called "audits". And the same thing again with Bitfinex propping up Tether just before their "audits". Every centralized exchange is the same.

As long as the owner didn't sign a message, I never believe with any number appeared in the site or claimed were belong to them. Actually they need to do that at the same time when they release their financial statement e.g. once a year or every quarter.

It's really dumb if someone can trust someone words without validating it, just like a popular phrase in Bitcoin "don't trust, verify".

It is so sad to see that exchanges foundations are built on lies just to make people feel that they their funds are safe in their exchanges. It means that centralized exchanges are out here to scam customers of their funds but pretends as if they have the safety of customers funds as their priority.

They claim to have SAFU funds which the numbers are not through because they know that customers will not bother, if it is true of not. They gain customers trust with lies and this shows that they can come up anytime with an Exit scams. One needs not to ever leave a penny in a centralized exchange and also advice whoever that leaves their funds in Cex that it is not safe and that they are manipulators.

I pity for individuals and institutions who finds it difficult to keep their funds in their self custody but needs exchanges to keep their coins for them, because they will be the victim if the exchange crashes, many of them should have learnt their lessons from FTX crash but they are still ignorant of it.