Look at this video ( it is from Crypto believer) Although 10/10 for the CEO to front up many question remain 1) The 20 B they say " in treasury" has gone down to 13 B , so these are client assets NOT Company cash, 2) He admits eventually 1+ B the is lost will have to be paid ( unless they go belly up) and the 1:1 backing has to be restored , so where is this money going to come from ? past profits? remember the 20 B ( 13) does not belong to them This reminds me of regulation study I did when a OTC broker ( regulated ins supposed to be top notch OECD country) went belly up, the regulations stated that the Client money MUST NOT BE CO MINGLED WITH COMPANY MONEY .. Does this also not apply to these Crypto "Exchanges" if not why not? 3) What the hell is 1:11 backing? why would an exchange who holds real client assets to have to back it with real cash.. exchange's role is just to facilitate the trading 4) People say Crypto ETF are safer! How the ETF has to store the Crypto some place ! 5) This hacking is akin to say NYSE loosing 30% of shares of a major listed company! due to hacking, how come that has not happened
That's why trading high-leveraged products is relatively safe. High leveraged product ---> You just put a little money into your segregated / non-segregated or whatever account If the Exchange CEO goes to India to die, or if your non-segregated account vaporized into thin air, then you lose just a little money. But many people said high-leveraged products is dangerous?! BYBIT means ByeBye BITcoin
Interesting point but the problem with High leverage (1:50 and above) are regulated in such a tin pot jurisdictions that the barrier to entry is very low so more scam brokers , max leverage one can get in a relatively leveraged environment is day trading Futures 1ES day trading margin 1000 , Overnight for same 13K +
In which Jurisdiction though UK/USA/ AUS/ EU/ SINGAPORE.. and also OTC or Exchange traded Only UK offers 85K pound protection for any FCA regulated entity US SIPC is up to 250K only for equity , does not cover Futures or OTC
Certainly there are some obscure layers with these and other firms, staking your financial future on such can be at times poor risk management. The only highly leveraged instruments I currently use for risk management are some of the CME futures instruments, where I certainly have never had any concerns about any your above mentioned factors. Plus I have had some great email conversations with a few of their employees from various specialty departments over the years, like Metals and Energy. For example, right now the notional value of the 2 Year Treasury Note, ZT, is around $206,000, and yet I can hold it overnight for an initial margin of $1,320. Effective leverage of about 156 even overnight. Excellent margins also for 5 Year Note ZF, and the Canadian Dollar for example, Aussie not bad either. And quite decent for Gold, which I have held overnight many a time. Some people complain about CME fees going up and such, but I personally am quite thankful for what they have enabled me to do over the years.
With US regulated Futures brokers do you know that there is no SIPC protection unlike stock brokers ? for example MF Global failure.. you may not be concerned because most FCMs are reputed but MF Global type can happen
Yes, that is correct, and I followed the MF Global fiasco in real time back then. As you know that firm was quite the outlier, fortunately. Due diligence is important for sure. One of my sisters was the assistant internal auditor for a large university, and a CPA/MBA, so I had heard a few stories over the years. I use 2 different futures brokers, and I did some investigating ahead of time regarding their reputations, capital levels, etc. as a part of my Risk Management. Trading is about continual Risk Management and dealing with continual uncertainty, but I am satisfied with both CME and my brokers, within my realistic and reasonable parameters.
Wow, you brought up some great points—honestly, the whole situation seems pretty messy. Client money should always be separate from company funds, and the fact that crypto exchanges sometimes blur these lines is exactly why I feel stressed trusting them. The "1:1 backing" means exchanges should always have enough reserves to cover what customers deposited, but clearly that's not happening here. And you're totally right about ETFs—they're usually safer because they're regulated, but at the end of the day, someone has to store the crypto securely, too. Your analogy about the NYSE losing 30% of a company's shares is spot-on—it really puts into perspective how risky the crypto space still is. Keep asking these tough questions; it’s exactly what's needed to push for better regulation and transparency.
Thanks for acknoldging these points, unfortunately under the name of New Thechnology Millenium Sexy app etc people forget that Money is money and a good regulations are needed and specially Crypto people are like cult members they dismiss such concerns , I mean how can one raise money from public doing a 4 page PDF documents called ICO and has hardly any scrutiny compare that with the requirements for an IPO