Is crypto era over?

From a commercial sense the business model of providing mortgages or retaii loans makes very little sense. Take Ireland for example lending to retail customers and indeed commercial customers and property mortgages require a firm to be regulated by the Central Bank. There is capital requirements and then compliance with various codes including eg cps , ccma.

Now if you get over that hurdle there is then the economics. The loans would have to be in fiat as the majority of homesllwrs or car dealerships don’t take crypto. The customer would have to put collateral probably usdc or eth and then pay back a monthly repayment drip feeding it in. The assets could be held as collateral but actually crystaliding that is near to impossible. So capital outlay In a market that protects the customer to the hilt is not financially viable. They would make way more money at less risk of default by Airbnb the market or becoming a market maker.

I think we are the end for institutional clients leaving there assets on an exchange. Actual third party regulated custodians should contribute to the safety and protection of the customers. The exchanges are trying their best to make it dffucult for those custodians and are promoting their self custody options. The proof of reserves concept is a joke as it’s literally back of a fat packet and quite similar to alameda AAA rated balance sheet which as literally made of sand.

Exchanges are utilising their unregulated status to in effect con the comfort of their clients as they roll our audit reports and the customer base thinks that’s all that’s needed but the audit report is based on the exchange confirmations rather than a root and branch deep dive.

it’s unbelievable that the likes of SBFstill has a platform at the likes of the NY times summit. Be similar to madoff speaking at the NYSE summer launch 3 days after his clients lost everything. With regards to the robberies or indeed hacks it’s drastically different the chances based on the asset. Tether just burned all the stolen to,ems and replaced them to the customers. Bitfinex had law enforcement watching those wallets for years until that day that they moved them and most are returned.

w are seeing more cases where wallets are being frozen and trying to return stolen assets. Good example of this was the lcx case. However the stakeholders like the exchanges and vasps instinctively jyst say not my problem. Historically this was just accepted as part of the enigma. However it remains to be seen if this concept is going to continue. A multi lateral trading facilit6 cannot have an unreasonable component that could leave a customer to suffer damages without appropriate mitigation and controls. I don’t know how this could be achieved but it’s something that will be expected by legislators. One concern I have is some of the senators on the committee and the depos are literally clueless and obviously of their depth. But then again a lot of people in the industry are too.

That’s very true. But customers have to bear responsibility if they leave their assets on an exchange instead of in a cold wallet off exchange, it’s obviously done for ease and convenience and fear of losing the private key but we have seen so many instances of it that the penny has to drop. It’s probably a better baloney rather than a bank, but more like loads of art collectors leaving their master pieces in a warehouse that they don’t really know how safe it is. And even worse several neighbours have had the art robbed over and over.

Another area that the regulators will probably demand is appropriate insurance cover. It’s iinxredibly and that will drive up costs.

bDefinitely pros in that approach. The biggest issue I would see for entitiesto do this would be not only having to comply with crypto regulations+ they would qoso have to comply with lending. codes of practice which are different in each country. There would be stringent requirements for arrears handling, complaints handling would have to have call centres; strict timeframes for letters etc. it’s bloody difficult and not something that any crypto firm would used to.

Not only that huge capital outlay in funding the loans with a quite a hefty default rate. They then have to have asset collection and sales. And how would they be able to offer the loans at significantly lower rates with all the additional compliance requirements. We have seen the absolute horror show from lending firms offering huge coupons for assets which ended up destroying the firm. The loans would have to priced with a buffer to cover default and then to collect arrears has to be done in a very rigid manner.

I think I said it previously, that the possibility to make way more money by utilising the assets that you are lending out. I got the first retail credit firm authorised in Ireland and they were quite successful in the non bank mortgages. They received major funding and invested into mortgage based securities and 5 major bonds using the mortgaged properties as collateral. Perhaps something similar but In a crypto package. But definitely in the EU crypto asset service providers would never have experienced the operational compliance disclosures that are required. There is also the risk that the digital assets they would hold as collateral dramatically in value meaning the solvency and liquidity requirements of the regulators would be breached and then a default event occurs.

There is a lot of great ideas being discussed at the moment but what the participants need to realise is the landscape has and will completely change in the next 18 months making the roadmaps maybe not quite as attractive or straight to product as they previously have been

At this stage it will be an absolute miracle of SBF stays out of jail, market manipulation and gambling with customer funds will not go down too well. He's already stated he doesn't have all his data so I expect there to be a lot of memory loss at any upcoming hearings.

He doesn't seem to me the kind of guy who would do well in an American prison

Has that actually been verified? I mean on one hand they are competitors, but he nature of the crypto market is such that they all have a vested interest so it would make sense, however the notion that a 250k transaction would jeopardise the coin seems a bit off.

If it's true, it's very serious

It's like a bunch of college kids playing business while being utterly ignorant of competition law or risk frameworks.

Yeah, it makes me think that the FTX downfall may be down to sheer stupidity and arrogance. I have a hard time believing someone would do something deliberately criminal in such an open way, such as not having proper accounting controls and going to US congress. It just reeks of arrogance where people think they are the smartest people in the room and everyone else doesn't get it.

Of course, I expect him to be locked up in the future. There is a lot of outrage about why he isn't in jail straight away, it takes time to build a case and people being angry online isn't a reason for someone to be in prison.

I dont get it, reuters put out an article basically saying they haven't actually spoken to the authorities but have spoken to people in and around the case, and the authorities may or may not prosecute CZ and others

Quickbooks as their accounting system, I guess I expect my criminal masterminds to be a bit more clever.

https://twitter.com/TheStreet/status/1602693770524377091?ref_src=twsrc%5Egoogle%7Ctwcamp%5Eserp%7Ctwgr%5Etweet

As soon as they announced that, people where questioning the liabilities they and their users hold. I don’t expect them to go bust but as always it’s better to be holding your own assets.

I'm pretty sure you said the same in 2018. Not saying you're wrong of course, perhaps it has this time.

Or perhaps people never learn and keep returning to casinos.

Conversely as for those saying "buy now", I wouldn't touch it with a bargepole until it's at least 50% less than current.

You might be getting your wish

Over my years I've realised I am not actually investing in crypto, but in people going nuts for it every few years

Ethereum L2 is picking up well.

Future looks bright for network usage.

What it is being used for I don't know.

But they are being used!

You aren't actually coming across there as well as you think you are.

It makes sense if you believe crypto is a ponzi and you are willing to put your money in with a belief that there will always be someone coming after you, that's basically what you are saying, you are a willing contributor towards what you believe to be a crypto ponzi because you have no understanding or belief in the product, but will outsmart it because you understand it to be a ponzi?

Market cap doesn’t represent value. There are plenty in the top twenty that you could cull and it would be of no loss the overall market, probably better for it. The other side of this is that there are others that are completely undervalued. The space needs more informed users.

Would instaneous transfer of for example stablecoin to anywhere in the world be a fundamental use as opposed to snail pace of fiat transfer?

Indeed. I just transferred money for my nephews from Perth WA to Dublin and my sister had it instantly