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Speaker 1: Hello everyone, and welcome to the latest episode from the

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Speaker 1: midweek edition of the coin Bureau podcast. Every week, I

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Speaker 1: pick out two of my favorite videos from coin Bureau's

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Speaker 1: YouTube channel to present to you in podcast form. The

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Speaker 1: audio you're about to hear is from those videos I've

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Speaker 1: chosen this week, and I hope you enjoy listening. First up,

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Speaker 1: back to ft X, the big story of the moment

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Speaker 1: and likely to remain so for some time yet. The

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Speaker 1: company is now in the throes of bankruptcy proceedings, and

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Speaker 1: the recent chapter eleven filing that kicked these off makes

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Speaker 1: interesting reading. To put it mildly, the filing was submitted

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Speaker 1: by one John J. Ray the Third, the man now

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Speaker 1: serving as f t X is CEO and charged with

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Speaker 1: clearing up the mess left behind by his predecessor, and

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Speaker 1: what a mess it is. The filing reveals just how haphazardly, unprofessionally,

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Speaker 1: and dan Wright negligently f t X and Alameda Research

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Speaker 1: were run by Sam bankman Fried and his inner circle

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Speaker 1: of friends and acolytes. The filing almost reads like an

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Speaker 1: outline for how not to run a company and has

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Speaker 1: left many in the crypto industry and beyond aghast. In

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Speaker 1: the first part of today's episode, you'll hear our breakdown

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Speaker 1: of it. Keep those stress balls at the ready. One

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Speaker 1: of the talking points in the wake of the f

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Speaker 1: t X scandal is around proof of reserves. This is

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Speaker 1: the idea that crypto exchanges should become more transparent about

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Speaker 1: the assets they hold and crucially, their liabilities as well.

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Speaker 1: So many people trusted f t X to hold their

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Speaker 1: assets and saw that trust abused. That cannot be allowed

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Speaker 1: to happen again. So have a listen to our breakdown

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Speaker 1: of what proof of reserves means and what some of

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Speaker 1: the biggest exchanges out there are doing to reassure their

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Speaker 1: users that they do in fact have the necessary funds

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Speaker 1: to hand to honor withdrawals. We also ask the question

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Speaker 1: of whether the future lies not with centralized exchanges but

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Speaker 1: decentralized ones instead. Could recent events be the start of

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Speaker 1: a shift in how people buy crypto Thanks for listening

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Speaker 1: to today's episode, and there'll be more coming your way

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Speaker 1: very soon. And if you want even more content from

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Speaker 1: coin Bureau, be sure to subscribe to our YouTube channel

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Speaker 1: and visit us on social media too. It's been two

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Speaker 1: weeks since f t X and Alameda Research collapsed. And

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Speaker 1: yet we are still only just starting to understand what

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Speaker 1: happened and what the effects on all of cryptocurrency could be.

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Speaker 1: One of the biggest bombshells so far has been ft

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Speaker 1: x is bankruptcy filing from last Thursday. What it reveals

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Speaker 1: about the crypto exchange is downright disturbing and foreshadows further

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Speaker 1: grave issues for crypto. Today, I'm going to give you

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Speaker 1: a summary of f t x is bankruptcy filing, tell

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Speaker 1: you what it says in simple terms, and explain exactly

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Speaker 1: how it could affect the crypto market. Okay, let's get

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Speaker 1: straight into it. F t x is bankruptcy filing begins

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Speaker 1: with a declaration from the exchangees new CEO, John J.

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Speaker 1: Ray the third Now there is a name for context,

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Speaker 1: Sam Bankman. Fried stepped down as CEO of f t

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Speaker 1: X when f t X and its sister company, Alameda

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Speaker 1: Research declared bankruptcy on the eleventh of November. You should

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Speaker 1: also know that John is famous for being the CEO

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Speaker 1: in charge of overseeing the bankruptcy of American energy company Enron.

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Speaker 1: John has also worked on other high profile bankruptcies such

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Speaker 1: as Nortel. His involvement in the ft X bankruptcy therefore

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Speaker 1: underscores how serious the situation is now. John starts by

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Speaker 1: saying that he was appointed CEO of f t X

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Speaker 1: in the quote early morning hours of the eleventh of November,

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Speaker 1: and his first order of business was to file for bankruptcy.

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Speaker 1: His second order of business was to work with blockchain analytics, firms, regulators,

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Speaker 1: and law enforcement to identify f t x's assets. John

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Speaker 1: then bluntly states, quote, never in my career have I

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Speaker 1: seen such a complete failure of corporate controls and such

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Speaker 1: a complete absence of trustworthy financial information as occurred here.

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Speaker 1: This statement made the headlines in both the crypto and

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Speaker 1: mainstream media's. John goes on to explain that the Chapter

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Speaker 1: eleven bankruptcy filing by f t X has five objectives.

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Speaker 1: Implementation of controls I set up new procedures in the company,

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Speaker 1: asset protection and recovery, transparency and investigation of Sam Bankman Freed,

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Speaker 1: efficiency and coordination with regulators, law enforcement, et cetera. And

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Speaker 1: the maximalization of value i e. Compensating those affected as

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Speaker 1: best as possible. John reveals that the information in this

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Speaker 1: bankruptcy filing is based on his knowledge of what was

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Speaker 1: going on at f t X. Obviously, the information is

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Speaker 1: likely to be incomplete, hence why John notes that f

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Speaker 1: t X will submit additional information in the coming weeks

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Speaker 1: as it's unearthed. In other words, this still might just

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Speaker 1: be the tip of the iceberg. Now, the first part

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Speaker 1: of the bankruptcy filing details how f t X was structured.

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Speaker 1: John identifies for groups of businesses which he refers to

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Speaker 1: as silos. The first is called the w R S silo,

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Speaker 1: and it includes all of f t X, S U

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Speaker 1: S companies and subsidiaries. Now, for the sake of simplicity,

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Speaker 1: I'll refer to the w R S silo as the

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Speaker 1: f t X U S silo. The second silo is

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Speaker 1: the Alameda silo, which includes all the companies related to

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Speaker 1: Alameda Research, which was one of the biggest traders and

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Speaker 1: market makers in crypto. Alameda was actually the largest recipient

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Speaker 1: of all the U S DT ever issued by Tever.

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Speaker 1: More about that in the description I digress. A footnote

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Speaker 1: for the Alameda silos balance sheet notes that Alameda Research

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Speaker 1: loaned one billion dollars to Sam Bankman freed over five

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Speaker 1: D forty million dollars to engineering director Nishad Singh. And

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Speaker 1: over fifty million dollars to f t X co CEO

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Speaker 1: Ryan Salame. The third silo is the ventures silo, which

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Speaker 1: includes all the companies related to ft x's investment activities.

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Speaker 1: Now John refers to the fourth silo as the dot

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Speaker 1: com silo. This is a little confusing since the dot

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Speaker 1: com silo includes all of f t x is overseas

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Speaker 1: companies and subsidiaries. So let's just call this the ft

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Speaker 1: X BBAL silo. Now, John explains that these four silos

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Speaker 1: make up the f t X Group. Not Surprisingly, Sam

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Speaker 1: Bankman Freed was the controller of all four silos. John

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Speaker 1: notes f t X and Alameda Research co founder Gary

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Speaker 1: Wang as a minority shareholder in f t X group,

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Speaker 1: along with Nishad Singh, who was apparently also a co founder.

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Speaker 1: What's crazy is that no other investors besides Sam, Gary,

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Speaker 1: and Nishad held more than two percent of any of

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Speaker 1: the silos. What's even crazier is that f t X

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Speaker 1: had raised two billion dollars before going bust. This means

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Speaker 1: that those investors got basically nothing in return, which raises

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Speaker 1: lots of questions in my book. Anyways, what you're looking

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Speaker 1: at here is a breakdown of the four silos, along

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Speaker 1: with the ownership stakes that Sam, Gary Nishad and other

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Speaker 1: investors had in them. If you're just listening in, Sam

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Speaker 1: held fifty of the f t x U S silo,

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Speaker 1: of the Alameda silo, sixty seven percent of the Venture silo,

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Speaker 1: and seventy five percent of the f t x Global silo.

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Speaker 1: Third party investors only held two percent of the f

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Speaker 1: t x U S silo and twenty five percent of

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Speaker 1: the f t x Global silo. The rest was owned

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Speaker 1: by the trio. John also provides a corporate structure chart

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Speaker 1: for these silos and their sub surgeries. Now, there's honestly

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Speaker 1: too much information to go over here, and it's also

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Speaker 1: kind of pointless to summarize since John cautions that it's

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Speaker 1: preliminary I incomplete. The link to the full bankruptcy filing

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Speaker 1: will be in the description if you want to take

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Speaker 1: a closer look. The company organization chart is on the

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Speaker 1: very last page. Anyways, John goes on to give a

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Speaker 1: detailed breakdown of each of the four silos, starting with

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Speaker 1: the f t x U S one. He begins by

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Speaker 1: explaining that the f t x US Exchange itself had

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Speaker 1: over one million users and was registered with the Department

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Speaker 1: of the Treasury as a money services business. Not only that,

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Speaker 1: but one of the subsidiaries of f t x US

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Speaker 1: was registered with the SEC. Some of you may have

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Speaker 1: heard that there are peculiar connections between f t x

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Speaker 1: Alameda Research and the SEC via SAM and Alameda CEO

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Speaker 1: Caroline Ellison I reckon this SEC registration is another peculiarity

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Speaker 1: to add to that pile. After talking about all the

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Speaker 1: other subsidiaries that were owned and operated by the f

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Speaker 1: t x U s silo, John reveals that these subsidiaries

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Speaker 1: hold around one point four billion dollars in assets. However,

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Speaker 1: he cautions that the numbers are likely incorrect due to

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Speaker 1: Sam's involvement in the balance sheet report. It was also unordered. Interestingly,

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Speaker 1: the f t x US silo appears to have just

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Speaker 1: under four hundred thousand dollars of liabilities, that is debt.

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Speaker 1: John notes that this can't possibly be accurate given that

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Speaker 1: f t x US presume be held billions of dollars

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Speaker 1: in user assets, which would count as liabilities but are

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Speaker 1: not noted in the balance sheet report. Next, John gives

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Speaker 1: a detailed breakdown of the Alameda silo, as with the

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Speaker 1: f t x U S silo. John cast doubt on

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Speaker 1: the idea that Alameda Research had thirteen point five billion

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Speaker 1: dollars in assets and just five billion dollars of liabilities.

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Speaker 1: This is again because the balance sheet report was provided

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Speaker 1: by SAM and unordited. Like the others. For the Ventures silo,

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Speaker 1: the balance sheet has been divided into two for the

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Speaker 1: two major subsidiaries of the silo. Together, these two subsidiaries

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Speaker 1: had two billion dollars in assets and an almost equal

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Speaker 1: amount in liabilities, though John says it is once again

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Speaker 1: unknown whether their balance sheets are correct. And last, but

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Speaker 1: not least, we have the ft X Global Silo, and

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Speaker 1: John admits that his team couldn't figure out how many

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Speaker 1: users the ft X Exchange actually had. All they know

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Speaker 1: for now is that SAM claimed f t X head

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Speaker 1: quote millions of users who had over fifteen billion dollars

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Speaker 1: of crypto on the exchange at the end of one

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Speaker 1: the most likely cooked books claimed that f t X

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Speaker 1: had over two point to five billion dollars of assets

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Speaker 1: versus less than five hundred thousand dollars of liabilities. As

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Speaker 1: with f t x U S, it's essentially guaranteed that

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Speaker 1: f t X is liabilities were exponentially larger due to

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Speaker 1: the billions of dollars of customer assets that were on

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Speaker 1: the exchange. The second part of the bankruptcy filing explains

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Speaker 1: the events that happened shortly before the filing itself took place.

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Speaker 1: John explains that the freeze on ft x's assets by

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Speaker 1: Bahamas regulators shortly before the bankruptcy filing only applied to

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Speaker 1: one of the subsidiaries of the f t X Global

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Speaker 1: silo explains a lot. As for Sam, he was consulting

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Speaker 1: with numerous lawyers, including his own father, about his resignation

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Speaker 1: as CEO and the commencement of ft x is bankruptcy.

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Speaker 1: At around four thirty a m. On the eleventh of November,

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Speaker 1: Sam conceded defeat and handed over control of all of

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Speaker 1: f t X to John, who immediately filed for Chapter

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Speaker 1: eleven bankruptcy. This ties into the third part of the

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Speaker 1: bankruptcy filing, which explains what John has done since that point.

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Speaker 1: The first thing he did was established a governance structure

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Speaker 1: for f t X and each of its four silos,

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Speaker 1: something you'll recall as being the first of the five

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Speaker 1: Chapter eleven bankruptcy objectives. John explains that he and the

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Speaker 1: newly appointed directors of the four silos will work together

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Speaker 1: to meet all five objectives of the Chapter eleven bankruptcy.

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Speaker 1: He acknowledges that this will be easier said than done,

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Speaker 1: as all four silos are interrelated and could therefore have

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Speaker 1: overlapping claims on the same assets. John then die its

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Speaker 1: deeper into f t x is financials, and many of

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Speaker 1: his findings made the headlines. The first finding was that

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Speaker 1: f t x did not keep track of its cash balances,

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Speaker 1: bank accounts or the people who oversaw those bank accounts.

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Speaker 1: They also didn't consider the quality of banks they were using.

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Speaker 1: John explains that his team will do their best to

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Speaker 1: find f t x IS cash and transfer it all

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Speaker 1: to financial institutions in the United States. Naturally, each silo

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Speaker 1: will have its own account. Now, I couldn't help but

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Speaker 1: notice that these cash transfers will only occur if they

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Speaker 1: can be done quote without adverse consequences. I wonder what

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Speaker 1: that means conspiracies aside. So far, John and his team

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Speaker 1: have managed to dig up over two dozen ft X

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Speaker 1: bank accounts around the world that collectively hold over five

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Speaker 1: hundred million dollars in cash. The relevant banks have been

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Speaker 1: instructed to freeze all these accounts and not to process

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Speaker 1: withdraws for SAM or other signatories. Now, if you thought

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Speaker 1: f t x's bank account situation was sketchy, consider the

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Speaker 1: company's financial reporting. While the f t X u S

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Speaker 1: silo was being properly audited, the f t X Global

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Speaker 1: Silo was being audited by a questionable auditing firm that

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Speaker 1: claimed to be the first to open offices in the

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Speaker 1: Central Land. To add insult to injury, John couldn't find

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Speaker 1: any audited financial statements for the Alameda silo or the

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Speaker 1: Venture silo. He admits that it's going to take some

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Speaker 1: time to accumulate accurate financial information about the four silos.

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Speaker 1: Something tells me that those balance sheets will have a

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Speaker 1: lot of black holes. Did I mention that f t

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Speaker 1: X is Empire didn't even have an accounting department Anyhow,

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Speaker 1: It turns out that f t x is human resources

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Speaker 1: department wasn't any better than its financial department. John said

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Speaker 1: his team hasn't even been able to put together a

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Speaker 1: list of f t X employees because none of the

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Speaker 1: four silos had detailed records of that information. They didn't

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Speaker 1: even have board meetings for what it's worth. John says

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Speaker 1: he's been working closely with a core team of f

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Speaker 1: t X employees to figure out exactly what's going on.

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Speaker 1: Many of you probably heard the news that almost everyone

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Speaker 1: except Sam's in the circle was in the dark, and

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Speaker 1: many f t X employees also had their money on

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Speaker 1: the exchange. As expected, f t xs disbursements, that is,

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Speaker 1: payouts were about as disorganized, with employees having to submit

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Speaker 1: paycheck requests in a company chat room. As reported, some

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Speaker 1: of f t x's capital was used to acquire properties

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Speaker 1: in the Bahamas. The records of these transactions are of

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Speaker 1: course a complete mess. Regarding the custody of cryptocurrency, f

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Speaker 1: t X didn't keep any detailed record there either. If

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Speaker 1: I understand correctly, only Sam Bankman Freed and co founder

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Speaker 1: Gary Wang had access to the private keys for all

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Speaker 1: the crypto wallets of the f t X empire. These

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Speaker 1: private keys were transferred around using unsecured emails. By now,

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Speaker 1: most of you will know that Sam and Gary use

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Speaker 1: secret software to mask their misuse of customer funds, and

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Speaker 1: that Alameter Research was exempt from auto liquidation on f

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Speaker 1: t X. In plain English, this means that Alameda could

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Speaker 1: enter extremely risky trades and not lose money if the

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Speaker 1: trade went against them. The game was rigged in their

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Speaker 1: favor and they still lost. John also confirms that the

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Speaker 1: f t X Global silo and Alameda silo were both

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Speaker 1: governed by Sam and Gary. This is something that I

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Speaker 1: was wondering about in our video about the ft X

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Speaker 1: Alameter situation. It's insane to think that much of the

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Speaker 1: info has come out since that video. It will be

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Speaker 1: in the description if you missed it now. The bad

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Speaker 1: news is that John and his team have only been

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Speaker 1: able to locate around seven hundred and forty million dollars

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Speaker 1: of cryptocurrency held by f t X. This balance doesn't

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Speaker 1: include the almost four hundred million dollars of crypto that

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Speaker 1: was stolen from f t X, nor the three hundred

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Speaker 1: million dollars of ft T that was recently printed. What's

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Speaker 1: odd is that John seems to imply that Sam, Gary

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Speaker 1: and the other higher ups at f t X haven't

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Speaker 1: been able to identify other crypto wallets that may belong

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Speaker 1: to the exchange. This is odd because they damn well

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Speaker 1: should know, given that they were the only ones with

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Speaker 1: access to the private keys. I suppose it doesn't matter

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Speaker 1: because blockchain analytics companies are already hard at work tracking

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Speaker 1: down every transaction that went in or out of ft X. Ironically, enough,

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Speaker 1: chain Allie, this the largest blockchain analytics company, recently confirmed

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Speaker 1: that it had exposure to f t X. John reiterates

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Speaker 1: the fact that most f t X employees had no

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Speaker 1: idea what Sam and co. Were up to. They had

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Speaker 1: no idea that the assets of f t X and

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Speaker 1: Alameda were being traded back and forth, nor that the

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Speaker 1: cryptocurrencies of f t X users were being commingled with

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Speaker 1: the company's cryptocurrencies. Speaking of which, John confirms that f

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Speaker 1: t X had billions of dollars in other investments outside

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Speaker 1: of cryptocurrency. This is something that Caroline had mentioned on

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Speaker 1: Twitter during the chaos, but many people were skeptical. The

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Speaker 1: list of skeptics seems to include John, as his team

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Speaker 1: has yet to identify these other assets. This is all

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Speaker 1: because of f t X is unbelievably bad record keeping,

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Speaker 1: which extended to internal communication. Quote Sam Bankman. Freed often

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Speaker 1: communicated by using applications that were set to auto delete

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Speaker 1: after a short period of time, and encouraged employees to

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Speaker 1: do the same. The conspiracy theorists aren't going to have

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Speaker 1: a field day with that one. Now. Despite all these hurdles,

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Speaker 1: John assures the court that his team is collecting as

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Speaker 1: much information as possible about f t X as operations.

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Speaker 1: They're working with former and current regulators and law enforcement

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Speaker 1: around the world to that end. John and his team

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00:19:31,400 --> 00:19:34,880
Speaker 1: are also working to sort out all the different subsidiaries

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Speaker 1: f t X had around the world, including selling them

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Speaker 1: if they have any value. You can bet that competing

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Speaker 1: crypto companies are going to be keeping an eye out

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Speaker 1: for those fire sales. Now, what court my eye was

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Speaker 1: the section about access to data. That's because John notes

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Speaker 1: that his team cannot access certain data because quote the

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Speaker 1: debtors have been advised that attempts to access this property

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Speaker 1: of the estate may create a risk of its loss

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00:20:03,040 --> 00:20:07,800
Speaker 1: to unauthorized persons. John hints that this data is related

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Speaker 1: to the largest clients of f t X, as he

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Speaker 1: claims his team cannot make a list of the top

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Speaker 1: fifty largest creditors without it. I reckon this list will

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Speaker 1: eventually be produced, but it certainly begs the question of

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Speaker 1: what information will be admitted in closing. John takes a

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Speaker 1: dig at Sam, saying that he quote continues to make

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Speaker 1: erratic and misleading public statements on Twitter, and that these

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Speaker 1: statements should effectively be ignored. I reckon they're hard to

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Speaker 1: ignore when Sam should already be behind bars and not

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Speaker 1: tweeting or playing video games. So this brings me to

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Speaker 1: the big question, and that's what effect f t X

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Speaker 1: is bankruptcy filing is likely to have on the crypto market.

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Speaker 1: In short, it's going to be really bad. And that's

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Speaker 1: simply because f t X was believed to be one

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Speaker 1: of the most trustworthy crypto companies in existence. I mean,

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Speaker 1: take a second to consider that Sam was on a

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Speaker 1: first name basis with politicians, was actively pushing for crypto regulations,

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Speaker 1: and was allegedly in bed with the SEC and others.

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Speaker 1: The ft X exchange received billions of dollars of investment

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Speaker 1: from big names, including asset managers like black Rock. Heck,

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Speaker 1: even a Canadian pension fund invested in it. This gives

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Speaker 1: the impression to politicians, regulators, and even crypto holders that

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Speaker 1: no matter how clean a crypto company appears to be,

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Speaker 1: chances are it's doing something shady behind the scenes. The

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Speaker 1: supposedly high quality of other crypto exchanges is now being

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Speaker 1: called into question. And it's not good. You can bet

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00:21:48,280 --> 00:21:51,040
Speaker 1: your bottom bitcoin that we're going to see lots of

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Speaker 1: investigation into not just f t X, but every other

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Speaker 1: crypto exchange out there. This is almost guaranteed because ft

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Speaker 1: X and Alameda were massive players in the crypto industry.

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Speaker 1: This means they probably have lots of information about every

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Speaker 1: crypto company. As I mentioned earlier, Alameda Research was the

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Speaker 1: largest recipient of all the USDT ever issued by Terror.

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Speaker 1: This means there is a high likelihood that Alameda has

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Speaker 1: more information about Tether than any other crypto company besides

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Speaker 1: Tether itself, and it's likely this information will be revealed

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Speaker 1: very soon. On that note, the information that f t

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Speaker 1: X and Alameda have about counterparties maybe why Sam isn't

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Speaker 1: in prison. If it's true that f t X and

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Speaker 1: Alameda were working with the U. S Government in some capacity,

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Speaker 1: then you can bet that Sam has lots of information

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Speaker 1: on Uncle Sam to information that powerful people don't want

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Speaker 1: made public. Now, this is just my speculation, but to

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Speaker 1: my mind, it's the only explanation as to Sam continues

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00:23:01,200 --> 00:23:04,080
Speaker 1: to be living life as usual despite doing tens of

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Speaker 1: billions and dollars in damage to ft X is users.

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Speaker 1: And the wider crypto industry. It's probably a similar situation

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Speaker 1: for the other insiders at ft X and LAMED. In

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Speaker 1: any case, it's clear that we're nowhere close to getting

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Speaker 1: the full facts about what happened behind the scenes. Until

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Speaker 1: we do, there will be no shortage of conspiracy theories,

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00:23:24,080 --> 00:23:26,280
Speaker 1: some of which could well turn out to be true.

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Speaker 1: There will also be no shortage of scrutiny directed at

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Speaker 1: the crypto industry, and to be honest, much of it

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Speaker 1: will be justly deserved. Hold on tight. The collapse of

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Speaker 1: f t X and Lameter Research has left crypto holders

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Speaker 1: wondering what other exchanges might be doing with their customers

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Speaker 1: coins and tokens behind the scenes. The call for transparency

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Speaker 1: by the crypto community has been answered by most major

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Speaker 1: cryptocurrency exchanges, which have published proofs of their crypto reserves

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Speaker 1: over the last two weeks. Today, I'm going to explain

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Speaker 1: what proof of reserves means, scrutinize the crypto reserves of

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Speaker 1: some of these exchanges, and examine whether decentralized exchanges will

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Speaker 1: take over as a result. F t x is shenanigans

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00:24:18,000 --> 00:24:22,320
Speaker 1: have inevitably led to questions over the reliability and trustworthiness

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Speaker 1: of other exchanges, and rightly so. F t X secretly

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00:24:26,920 --> 00:24:30,440
Speaker 1: sent billions of dollars of its users cryptocurrency to prop

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Speaker 1: up its sister trading firm, Alameda Research. This is why

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00:24:34,280 --> 00:24:37,400
Speaker 1: f t X couldn't process all the crypto withdraw requests

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Speaker 1: coming from its users, and ultimately why the exchange had

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Speaker 1: to file for bankruptcy. Oddly enough, it was Binance CEO

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00:24:45,920 --> 00:24:49,360
Speaker 1: Chang Peng Zhao or c Z who proposed a solution

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Speaker 1: to the crypto community's collapse in trust. I say oddly

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00:24:53,720 --> 00:24:57,160
Speaker 1: because CZ's tweet that Binance would be dumping its ft

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Speaker 1: T is one of the catalysts that lead to t

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Speaker 1: X and alamedas collapse. On the eighth of November, CZ

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Speaker 1: tweeted quote, all crypto exchanges should do mircletrey proof of reserves.

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Speaker 1: Banks run on fractional reserves. Crypto exchanges should not. Finance

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Speaker 1: will start to do proof of reserve soon full transparency. So,

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00:25:21,359 --> 00:25:24,159
Speaker 1: for those unfamiliar, proof of reserves or p o R

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Speaker 1: essentially involves taking a cryptographic snapshot of the coins and

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Speaker 1: tokens held by a cryptocurrency exchange. Now, it's important to

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Speaker 1: note that p o R is supposed to be done

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Speaker 1: with the help of an independent third party or protocol.

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Speaker 1: In this case, it looks like most cryptocurrency exchanges have

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Speaker 1: been working with blockchain analytics platform Nansen for their po rs.

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Speaker 1: I'll leave a link to Nansen's exchange holding page in

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Speaker 1: the description if you're interested. Now, another thing that's important

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00:25:56,440 --> 00:25:59,040
Speaker 1: to note is that p o R is also supposed

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Speaker 1: to include the liabilities of a cryptocurrency exchange. In this context,

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00:26:04,840 --> 00:26:09,199
Speaker 1: liabilities means the coins and tokens and exchange is holding

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00:26:09,520 --> 00:26:13,880
Speaker 1: on behalf of its users. Obviously, these coins and tokens

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00:26:14,119 --> 00:26:19,240
Speaker 1: don't technically count as an exchanges assets. If you watched

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Speaker 1: our recent video about f t x is bankruptcy filing,

407
00:26:22,480 --> 00:26:24,680
Speaker 1: you'll know that both f t x u S and

408
00:26:24,960 --> 00:26:28,680
Speaker 1: f t x International didn't count their users crypto as

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00:26:28,760 --> 00:26:33,080
Speaker 1: liabilities on their balance sheets. This basically made it look

410
00:26:33,160 --> 00:26:36,480
Speaker 1: like both had enough crypto on hand to meet withdrawal

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00:26:36,600 --> 00:26:40,800
Speaker 1: demand when they really didn't. Now, the only exchanges that

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00:26:41,000 --> 00:26:44,480
Speaker 1: have included liabilities in their proof of reserves so far

413
00:26:45,000 --> 00:26:47,960
Speaker 1: have been Kraken, which actually began doing po R back

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Speaker 1: in February, gate dot Io, which uses the same accounting

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00:26:52,240 --> 00:26:57,160
Speaker 1: firm as Kraken, Armanino, and okay x, which apparently reported

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00:26:57,240 --> 00:27:01,680
Speaker 1: its own liabilities without an accounting firm. Funnily enough, coin

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00:27:01,760 --> 00:27:05,680
Speaker 1: Base has not provided p o R for assets or liabilities.

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00:27:06,280 --> 00:27:09,120
Speaker 1: Coin Bay c o O Emily Choi explained to coin

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00:27:09,200 --> 00:27:12,640
Speaker 1: Desk that this is because coin base is regularly audited

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00:27:12,760 --> 00:27:16,000
Speaker 1: as a publicly traded company, so its balance sheet is

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00:27:16,119 --> 00:27:19,520
Speaker 1: already fully available. I'll leave a link to it in

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00:27:19,600 --> 00:27:23,320
Speaker 1: the description if you're interested, and before I go on,

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00:27:23,640 --> 00:27:27,240
Speaker 1: I will caution that even if an exchange has done

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00:27:27,640 --> 00:27:30,760
Speaker 1: thorough p o R for both its assets and liabilities,

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00:27:31,080 --> 00:27:34,760
Speaker 1: there is no guarantee that your crypto is safe on

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00:27:34,920 --> 00:27:38,639
Speaker 1: that exchange. This is simply because you can never know

427
00:27:38,840 --> 00:27:42,040
Speaker 1: for sure that the individual or institution that crunched the

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00:27:42,160 --> 00:27:46,560
Speaker 1: numbers is being honest. The only way to guarantee the

429
00:27:46,680 --> 00:27:50,119
Speaker 1: safety of your cryptocurrency is to keep your coins and

430
00:27:50,280 --> 00:27:55,000
Speaker 1: tokens in your own personal, non custody or wallet. It's

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00:27:55,040 --> 00:27:58,800
Speaker 1: also the only way to guarantee your financial freedom, because

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Speaker 1: having millions in the bank means nothing if you don't

433
00:28:01,880 --> 00:28:04,920
Speaker 1: have the ability to spend that money when and how

434
00:28:05,119 --> 00:28:10,240
Speaker 1: you want. Seriously, guys, I can't stress this enough. Be

435
00:28:10,359 --> 00:28:12,639
Speaker 1: sure to check out my recent video about how to

436
00:28:12,760 --> 00:28:17,040
Speaker 1: keep your crypto safe. It too will be in the description. Now,

437
00:28:17,160 --> 00:28:19,399
Speaker 1: the first p o R I want to analyze comes

438
00:28:19,560 --> 00:28:23,160
Speaker 1: from Binance, which was, of course, after Kraken, the first

439
00:28:23,320 --> 00:28:26,240
Speaker 1: exchange to provide p o R. If I had my

440
00:28:26,320 --> 00:28:29,119
Speaker 1: tinfile hat on, i'd tell you that Binance lad the

441
00:28:29,240 --> 00:28:32,159
Speaker 1: charge for p o R to further squeeze its competitors.

442
00:28:32,680 --> 00:28:35,720
Speaker 1: Then again, other exchanges probably wanted to do p o

443
00:28:35,880 --> 00:28:39,840
Speaker 1: R to increase user confidence. In any case, the top

444
00:28:39,920 --> 00:28:45,400
Speaker 1: assets on binances balance sheet are as follows THT in

445
00:28:45,520 --> 00:28:48,760
Speaker 1: the b U s D stable coin, in the U

446
00:28:48,920 --> 00:28:52,880
Speaker 1: s D T stable coin, in BTC, just under ten

447
00:28:52,960 --> 00:28:55,560
Speaker 1: percent in b NB, eight percent in each, and the

448
00:28:55,680 --> 00:28:59,680
Speaker 1: remaining sixteen or so percent in other cryptocurrencies. Grand total

449
00:29:00,080 --> 00:29:03,440
Speaker 1: sixty seven billion dollars. Now, this would be amazing were

450
00:29:03,520 --> 00:29:05,680
Speaker 1: it not for the fact that Binance has yet to

451
00:29:05,760 --> 00:29:10,840
Speaker 1: publish proof of liabilities, specifically of user deposits. With an

452
00:29:10,960 --> 00:29:15,640
Speaker 1: estimated thirty million users, it's very likely that binances liabilities

453
00:29:15,720 --> 00:29:19,680
Speaker 1: are very large and likely on par with its assets,

454
00:29:19,920 --> 00:29:24,320
Speaker 1: as with other exchanges that have revealed their liabilities. That said,

455
00:29:24,600 --> 00:29:28,400
Speaker 1: in a Twitter spaces discussion, ces explained that Binance has

456
00:29:28,640 --> 00:29:32,600
Speaker 1: no liabilities. This doesn't make much sense given that the

457
00:29:32,680 --> 00:29:35,800
Speaker 1: exchange obviously holds the coins and tokens of many of

458
00:29:35,840 --> 00:29:40,200
Speaker 1: its users. This is admittedly concerning, but Binance should be

459
00:29:40,320 --> 00:29:45,320
Speaker 1: publishing its liabilities soon. More about that later in the interim.

460
00:29:45,480 --> 00:29:48,760
Speaker 1: We're likely to see no shortage of hit pieces such

461
00:29:48,800 --> 00:29:51,240
Speaker 1: as this one from Bloomberg, which took issue with the

462
00:29:51,320 --> 00:29:55,280
Speaker 1: fact that around fort of Binances reserves are held in

463
00:29:55,360 --> 00:29:58,360
Speaker 1: its own branded assets, namely b U s D and

464
00:29:58,600 --> 00:30:02,600
Speaker 1: b NB. Easy called the article fake news, and rightfully

465
00:30:02,680 --> 00:30:06,240
Speaker 1: so to some extent. That's because even though b U

466
00:30:06,400 --> 00:30:09,840
Speaker 1: s D is branded as Binances stable coin, it's actually

467
00:30:09,960 --> 00:30:14,160
Speaker 1: issued by Pasos, a heavily regulated stable coin issuer based

468
00:30:14,240 --> 00:30:17,680
Speaker 1: in the United States. Pasos actually seems to be the

469
00:30:17,880 --> 00:30:21,760
Speaker 1: most regulated stable coin issuer of them all, which theoretically

470
00:30:21,880 --> 00:30:25,880
Speaker 1: makes b U s D the safest stable coin finances.

471
00:30:25,960 --> 00:30:29,920
Speaker 1: Holdings of U s DT are more concerning, though. Tether

472
00:30:30,120 --> 00:30:34,160
Speaker 1: has already been under extreme scrutiny from US regulators for years.

473
00:30:35,120 --> 00:30:38,440
Speaker 1: Given that Alameda Research was the largest recipient of all

474
00:30:38,560 --> 00:30:41,680
Speaker 1: the U s DT ever issued, I suspect that this

475
00:30:41,800 --> 00:30:45,760
Speaker 1: scrutiny will soon return and possibly with even more intensity.

476
00:30:46,360 --> 00:30:49,720
Speaker 1: Don't even get me started about all the pending stable

477
00:30:49,760 --> 00:30:54,200
Speaker 1: coin regulations either. It's a similar story with b NB two.

478
00:30:54,800 --> 00:30:56,960
Speaker 1: If you watched our video about b NB you'll know

479
00:30:57,160 --> 00:30:59,680
Speaker 1: that it was created by Binance way back in twenty

480
00:30:59,760 --> 00:31:02,640
Speaker 1: seven team when it was known as binance Coin. B

481
00:31:02,800 --> 00:31:05,920
Speaker 1: n B became independent of Finance earlier this year and

482
00:31:06,000 --> 00:31:10,200
Speaker 1: rebranded as Build and Build, but b nbs ecosystem is

483
00:31:10,280 --> 00:31:14,280
Speaker 1: still dependent on Binance. If you want more of an

484
00:31:14,320 --> 00:31:17,360
Speaker 1: overview of Binance as an exchange, then you can check

485
00:31:17,400 --> 00:31:22,760
Speaker 1: out our review over here. Anyways, the second p o

486
00:31:22,960 --> 00:31:25,760
Speaker 1: R I want to analyze comes from crypto dot Com,

487
00:31:25,840 --> 00:31:28,360
Speaker 1: which was the second exchange to release its p o

488
00:31:28,520 --> 00:31:32,160
Speaker 1: R after Binance. If I recall correctly, Crypto dot Com

489
00:31:32,480 --> 00:31:34,880
Speaker 1: was planning on releasing its p o R closer to

490
00:31:35,000 --> 00:31:37,160
Speaker 1: the end of the month, but rush to release an

491
00:31:37,200 --> 00:31:41,200
Speaker 1: initial po R after questions arose about the exchange of solvency.

492
00:31:42,200 --> 00:31:45,600
Speaker 1: These questions arose because of the announcement by Crypto dot

493
00:31:45,680 --> 00:31:49,200
Speaker 1: Com that it was pausing deposit and withdrawals of USDT

494
00:31:49,480 --> 00:31:53,880
Speaker 1: and USDC on the Salana blockchain. What strange is that

495
00:31:54,040 --> 00:31:57,720
Speaker 1: this is exactly what Binance, okay x and other exchanges

496
00:31:57,800 --> 00:32:01,440
Speaker 1: did shortly afterwards, yet there were no cerns there in

497
00:32:01,560 --> 00:32:04,520
Speaker 1: any case. The top assets on Crypto dot COM's balance

498
00:32:04,560 --> 00:32:10,000
Speaker 1: sheet are as follows in BTC, in U s D,

499
00:32:10,120 --> 00:32:14,800
Speaker 1: cent in ship, even in EA, just under four percent

500
00:32:14,920 --> 00:32:17,840
Speaker 1: in U s DT, and around eighteen percent in other

501
00:32:17,960 --> 00:32:23,400
Speaker 1: cryptocurrencies grand total three billion dollars. Note, Crypto dot Com

502
00:32:23,480 --> 00:32:27,560
Speaker 1: claimed in its por release that it has more crypto elsewhere.

503
00:32:28,360 --> 00:32:31,720
Speaker 1: Like Binance, Crypto dot Com has yet to publish proof

504
00:32:31,760 --> 00:32:35,880
Speaker 1: of its liabilities. These liabilities are likely to be even

505
00:32:36,000 --> 00:32:38,960
Speaker 1: larger than Binances, given the Crypto dot Com claims to

506
00:32:39,040 --> 00:32:43,520
Speaker 1: have over fifty million users. This certainly begs the question

507
00:32:43,800 --> 00:32:46,719
Speaker 1: of why there's such a large difference between the assets

508
00:32:46,800 --> 00:32:50,800
Speaker 1: held by Binance and by Crypto dot Com. The answer

509
00:32:51,120 --> 00:32:54,760
Speaker 1: seems to be on chain. Shortly after Crypto dot Com

510
00:32:54,880 --> 00:32:57,120
Speaker 1: released its p O R, it was found that the

511
00:32:57,240 --> 00:33:02,120
Speaker 1: exchange transferred three twenty thousand e worth over four hundred

512
00:33:02,160 --> 00:33:05,640
Speaker 1: million dollars to gate dot Io in late October, which

513
00:33:05,760 --> 00:33:09,640
Speaker 1: was returned a few days later. Crypto dot Com CEO

514
00:33:09,920 --> 00:33:13,880
Speaker 1: Chris Marcellek claimed the transfer was just a mistake. It's

515
00:33:13,920 --> 00:33:17,200
Speaker 1: safe to say that the crypto community wasn't convinced because

516
00:33:17,280 --> 00:33:20,160
Speaker 1: Chris had to hold an emergency a m A to

517
00:33:20,320 --> 00:33:23,600
Speaker 1: clear up the confusion. Now I have yet to watch

518
00:33:23,680 --> 00:33:26,200
Speaker 1: that a m A, but it seems it was enough

519
00:33:26,320 --> 00:33:29,880
Speaker 1: to calm Crypto dot COM's holders since the exchanges chronos

520
00:33:29,920 --> 00:33:34,200
Speaker 1: coin pumped shortly afterwards. When it comes to Crypto dot

521
00:33:34,280 --> 00:33:38,160
Speaker 1: COM's actual assets, its balance sheet is definitely a mixed bag.

522
00:33:38,880 --> 00:33:41,760
Speaker 1: Having BTC as its largest holding is a bit risky

523
00:33:41,880 --> 00:33:45,560
Speaker 1: giving all the crypto market volatility. Having almost all your

524
00:33:45,600 --> 00:33:49,920
Speaker 1: stable coin holdings in circles USDC is likewise unwise. In

525
00:33:50,040 --> 00:33:54,480
Speaker 1: my opinion, I suppose it reveals which entities Crypto dot

526
00:33:54,520 --> 00:33:57,360
Speaker 1: Com is close to. More about the company taking over

527
00:33:57,440 --> 00:34:02,720
Speaker 1: cryptocurrency using the link in the description digress. Now, not surprisingly,

528
00:34:03,040 --> 00:34:06,360
Speaker 1: the news that Crypto dot Com holds a fifth of

529
00:34:06,480 --> 00:34:09,960
Speaker 1: its asset reserves in shiba e news ship token made

530
00:34:10,000 --> 00:34:13,439
Speaker 1: the crypto headlines. That's because ship is a meme coin

531
00:34:13,680 --> 00:34:17,480
Speaker 1: whose value is fundamentally reliant on retail speculation, which has

532
00:34:17,520 --> 00:34:20,680
Speaker 1: been quickly sucked out of the crypto market as it crashes.

533
00:34:21,320 --> 00:34:24,400
Speaker 1: Chris explained in the aforementioned a m A that quote

534
00:34:24,840 --> 00:34:28,319
Speaker 1: it so happens that last year does and ship were

535
00:34:28,400 --> 00:34:31,640
Speaker 1: too extremely hot meme coins and people bought a lot

536
00:34:32,080 --> 00:34:34,880
Speaker 1: and they're holding it. They didn't sell it. We have

537
00:34:35,280 --> 00:34:38,320
Speaker 1: no control over what you guys buy. You buy it,

538
00:34:38,840 --> 00:34:42,319
Speaker 1: we will store it, we will keep it safe. Now,

539
00:34:42,400 --> 00:34:45,040
Speaker 1: this actually makes a lot of sense, but it won't

540
00:34:45,080 --> 00:34:49,560
Speaker 1: be confirmed until crypto dot com publishes its liabilities. If

541
00:34:49,600 --> 00:34:52,520
Speaker 1: I understand correctly, this will be done in the next

542
00:34:52,560 --> 00:34:55,480
Speaker 1: few weeks, as the blog post announcing crypto dot COM's

543
00:34:55,520 --> 00:34:58,560
Speaker 1: assets p o R notes that it will confirm a

544
00:34:58,719 --> 00:35:04,680
Speaker 1: quote full to one reserve of all customer assets. Anyhow,

545
00:35:04,920 --> 00:35:07,600
Speaker 1: the third po R I want to analyze comes from

546
00:35:07,719 --> 00:35:13,200
Speaker 1: okay x, which you'll recall included liabilities, albeit self reported ones.

547
00:35:13,880 --> 00:35:16,799
Speaker 1: Okay x release its proof of reserves just a few

548
00:35:16,880 --> 00:35:19,279
Speaker 1: days ago, but what's annoying is that the proof of

549
00:35:19,320 --> 00:35:22,719
Speaker 1: reserves on its website doesn't tell us all that much.

550
00:35:23,560 --> 00:35:26,920
Speaker 1: That's because it only gives us info about okay x

551
00:35:27,040 --> 00:35:31,520
Speaker 1: is BTC eight and usd T holdings. Okay x claims

552
00:35:31,560 --> 00:35:35,120
Speaker 1: to hold around one hundred eight thousand BTC against one

553
00:35:35,239 --> 00:35:40,040
Speaker 1: hundred five thousand BTC of user holdings for it's one million,

554
00:35:40,200 --> 00:35:43,920
Speaker 1: fifty thousand against one million twenty five thousand, and for

555
00:35:44,120 --> 00:35:49,400
Speaker 1: USDT it's three billion sixty million against three billion, sixteen million.

556
00:35:50,200 --> 00:35:53,160
Speaker 1: The main takeaway is that okay x appears to have

557
00:35:53,320 --> 00:35:56,400
Speaker 1: more crypto on hand than the crypto that's been deposited

558
00:35:56,560 --> 00:36:00,400
Speaker 1: by its users. Now, this is excellent, but again it

559
00:36:00,600 --> 00:36:04,400
Speaker 1: doesn't include the other dozens of cryptocurrencies the exchange offers.

560
00:36:04,760 --> 00:36:10,720
Speaker 1: It's also not clear which accounting firm was involved, if any. Unfortunately,

561
00:36:11,120 --> 00:36:15,640
Speaker 1: Nansen doesn't have any additional data either. According to Nanson,

562
00:36:16,160 --> 00:36:19,200
Speaker 1: the top assets on okay x's balance sheet are as

563
00:36:19,239 --> 00:36:26,160
Speaker 1: follows almost fifty in USDT, pent in BTC, in five

564
00:36:26,200 --> 00:36:29,040
Speaker 1: pent in u s DC, and just a fraction of

565
00:36:29,120 --> 00:36:33,560
Speaker 1: a percentage point for all the other cryptocurrencies the exchange offers.

566
00:36:34,440 --> 00:36:37,920
Speaker 1: Okay x's blog post announcing its proof of reserves notes

567
00:36:38,080 --> 00:36:41,560
Speaker 1: that it will publish asset and liability information about the

568
00:36:41,640 --> 00:36:46,440
Speaker 1: other cryptocurrencies it holds soon to be exact. The exchange

569
00:36:46,480 --> 00:36:49,480
Speaker 1: said that the self audit feature will become available for

570
00:36:49,640 --> 00:36:54,120
Speaker 1: all these other cryptocurrencies. This is a small but significant

571
00:36:54,160 --> 00:36:58,399
Speaker 1: detail because self auditing means that okay x users can

572
00:36:58,480 --> 00:37:02,640
Speaker 1: cryptographically verify that the exchange holds the coins and tokens

573
00:37:02,719 --> 00:37:07,040
Speaker 1: it claims to. If I'm not mistaken, Kraken, Bitmex and

574
00:37:07,280 --> 00:37:10,759
Speaker 1: gate dot io are the only other crypto exchanges that

575
00:37:10,960 --> 00:37:15,799
Speaker 1: currently offer this feature. To my understanding, Finance, crypto dot

576
00:37:15,880 --> 00:37:19,360
Speaker 1: Com and others will be providing this same level of

577
00:37:19,400 --> 00:37:23,239
Speaker 1: transparency over the coming weeks. The only reason they don't

578
00:37:23,320 --> 00:37:26,400
Speaker 1: offer the self audit feature already is because most of

579
00:37:26,480 --> 00:37:29,800
Speaker 1: the info that's been released so far is the walllett addresses,

580
00:37:30,080 --> 00:37:33,879
Speaker 1: not the cryptographic proofs of reserve. Oh and in case

581
00:37:33,960 --> 00:37:37,280
Speaker 1: you're wondering, the grand total of okay x is crypto

582
00:37:37,360 --> 00:37:42,160
Speaker 1: holdings is around six billion dollars with around twenty million users.

583
00:37:42,320 --> 00:37:45,680
Speaker 1: It sounds like okay x is well capitalized, but as

584
00:37:45,800 --> 00:37:48,680
Speaker 1: with all the other exchanges so far, the devil is

585
00:37:48,800 --> 00:37:52,600
Speaker 1: truly in the detail. Although holding most of your reserves

586
00:37:52,640 --> 00:37:55,520
Speaker 1: in stable coins is safe, it's a lot less safe

587
00:37:55,560 --> 00:37:58,719
Speaker 1: when almost all these stable coin reserves are in one

588
00:37:59,120 --> 00:38:03,400
Speaker 1: specifically Tether's U s d T. As I mentioned earlier,

589
00:38:03,520 --> 00:38:07,160
Speaker 1: Tether is facing its fair share of regulatory scrutiny from

590
00:38:07,200 --> 00:38:10,839
Speaker 1: the United States and other countries. That is a bit

591
00:38:11,040 --> 00:38:15,560
Speaker 1: risky in my opinion. Even so, okay x is incomplete

592
00:38:15,600 --> 00:38:20,160
Speaker 1: reserves paint a fairly promising picture. The remaining fifty is

593
00:38:20,200 --> 00:38:24,280
Speaker 1: in BTC, E and USDC, and all three are pristine

594
00:38:24,360 --> 00:38:28,800
Speaker 1: collateral by crypto standards. Let's just hope that okay x

595
00:38:28,880 --> 00:38:31,200
Speaker 1: doesn't reveal that it's holding a massive chunk of its

596
00:38:31,280 --> 00:38:34,960
Speaker 1: reserves in some meme coin later down the line. Now,

597
00:38:35,080 --> 00:38:37,080
Speaker 1: if you want to do a bit more due diligence

598
00:38:37,160 --> 00:38:40,040
Speaker 1: on okay x, then we also have a review of

599
00:38:40,120 --> 00:38:42,320
Speaker 1: that as well, and I will leave that in the

600
00:38:42,440 --> 00:38:47,279
Speaker 1: description for you folks. Anyhoo. The fourth and final po

601
00:38:47,480 --> 00:38:50,239
Speaker 1: R I want to analyze comes from cow cooin, which

602
00:38:50,360 --> 00:38:53,920
Speaker 1: released all its wallet addresses earlier this month and is

603
00:38:54,000 --> 00:38:57,520
Speaker 1: working on a cryptographic po R with a third party auditor.

604
00:38:57,920 --> 00:39:01,560
Speaker 1: The blog posts announcing cou cooin's wallet notes the cryptographic

605
00:39:01,640 --> 00:39:05,319
Speaker 1: po R will be published in early December. In any case,

606
00:39:05,760 --> 00:39:08,799
Speaker 1: the top assets on cou Cooin's balance sheet are as

607
00:39:08,840 --> 00:39:14,799
Speaker 1: follows in U s DT just under eighteen percent in KCS,

608
00:39:15,120 --> 00:39:18,880
Speaker 1: eleven percent in BTC, around eight percent in EATH, around

609
00:39:18,960 --> 00:39:22,759
Speaker 1: seven percent in U s DC, and in everything else.

610
00:39:23,120 --> 00:39:26,279
Speaker 1: Grand total two point five billion dollars of assets to

611
00:39:26,400 --> 00:39:30,520
Speaker 1: back whatever liabilities are coming from cow cooin's twenty million users.

612
00:39:31,360 --> 00:39:34,680
Speaker 1: Like okay x and crypto dot Com, coucoin has almost

613
00:39:34,760 --> 00:39:37,440
Speaker 1: all of its stable coin eggs in one basket, in

614
00:39:37,560 --> 00:39:41,400
Speaker 1: this case USDT. This seems to be the standard for

615
00:39:41,520 --> 00:39:44,720
Speaker 1: most crypto exchanges that aren't based in the United States,

616
00:39:44,800 --> 00:39:47,880
Speaker 1: and it underscores how much damage would be done to

617
00:39:48,000 --> 00:39:52,760
Speaker 1: the crypto ecosystem if tether is ever taken down. Similarly

618
00:39:52,840 --> 00:39:56,440
Speaker 1: to binance, cow cooin holds a substantial chunk of its

619
00:39:56,520 --> 00:40:01,080
Speaker 1: reserves in its own KCS token. In contrast to finances BMB,

620
00:40:01,640 --> 00:40:06,440
Speaker 1: cow Cooin's kcs has limited exchange support and very low liquidity. However,

621
00:40:06,960 --> 00:40:09,800
Speaker 1: the k c s chain also doesn't have nearly the

622
00:40:09,920 --> 00:40:14,040
Speaker 1: same amount of activity and adoption as BMB. This means

623
00:40:14,200 --> 00:40:17,280
Speaker 1: that the k CS tokens price action is entirely dependent

624
00:40:17,440 --> 00:40:21,080
Speaker 1: on cow cooin. If the exchange ever were to experience

625
00:40:21,120 --> 00:40:25,439
Speaker 1: any issues, kcs is price would plummet. In a worst

626
00:40:25,520 --> 00:40:29,160
Speaker 1: case scenario, this could wipe out almost twenty of cou

627
00:40:29,239 --> 00:40:33,120
Speaker 1: cooin's crypto reserves. Now, the remainder of coucoin's reserves are

628
00:40:33,280 --> 00:40:37,120
Speaker 1: interesting yet expected, barely a fifth in btc anda and

629
00:40:37,280 --> 00:40:41,000
Speaker 1: almost a quarter in mid to small caval coins. This

630
00:40:41,360 --> 00:40:43,560
Speaker 1: makes sense because cou cooin is one of the most

631
00:40:43,600 --> 00:40:47,160
Speaker 1: popular exchanges to go to for mid to small cabal coins,

632
00:40:47,360 --> 00:40:49,879
Speaker 1: and the ones at list tend to be pretty good

633
00:40:49,960 --> 00:40:53,439
Speaker 1: as well. Now I should also note that coucoin's blog

634
00:40:53,520 --> 00:40:56,560
Speaker 1: post about its wallet addresses also states that it has

635
00:40:56,640 --> 00:41:00,279
Speaker 1: more reserves than it has reported so far. The fact

636
00:41:00,400 --> 00:41:04,240
Speaker 1: that coucoin will be providing cryptographic po are also suggests

637
00:41:04,280 --> 00:41:07,440
Speaker 1: that the exchange will be providing the liability side of

638
00:41:07,640 --> 00:41:11,080
Speaker 1: its crypto balance sheet too. This is all well and good,

639
00:41:11,239 --> 00:41:14,520
Speaker 1: but I'll reiterate that the only way to know for

640
00:41:14,680 --> 00:41:18,560
Speaker 1: sure that your cryptocurrency is safe is to keep it

641
00:41:18,719 --> 00:41:22,280
Speaker 1: in your own personal wallet. Only keep what you're actively

642
00:41:22,360 --> 00:41:25,960
Speaker 1: trading on exchanges. Otherwise, keep everything in a hot or

643
00:41:26,120 --> 00:41:35,200
Speaker 1: cold wallet, and don't say I didn't warn you. That

644
00:41:35,360 --> 00:41:38,200
Speaker 1: being said, if you want an overview of coucoin more broadly,

645
00:41:38,320 --> 00:41:40,640
Speaker 1: I have a video for you on that as well.

646
00:41:41,000 --> 00:41:45,640
Speaker 1: Top right, poor Furborn. So this brings me to the

647
00:41:45,680 --> 00:41:49,719
Speaker 1: big question, and that's whether decentralized exchanges are destined to

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00:41:49,800 --> 00:41:53,960
Speaker 1: take over due to the transparency issues of centralized exchanges.

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00:41:54,400 --> 00:41:57,520
Speaker 1: In short, yes, but it's going to take quite some

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00:41:57,719 --> 00:42:01,520
Speaker 1: time for the decks experience to eat the sex experience.

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00:42:02,440 --> 00:42:06,320
Speaker 1: For starters, there's the trading experience. Using a dex is

652
00:42:06,400 --> 00:42:09,920
Speaker 1: not nearly as easy as using a sex For crypto neuves,

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00:42:10,840 --> 00:42:14,040
Speaker 1: dex is also don't provide nearly the same degree of

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00:42:14,120 --> 00:42:18,200
Speaker 1: flexibility to crypto experts. The good news is that progress

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00:42:18,320 --> 00:42:20,440
Speaker 1: is being made on both fronts. By while it's like

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00:42:20,600 --> 00:42:25,239
Speaker 1: phantom and order book DEXes like GMx. Then there's the

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00:42:25,320 --> 00:42:30,680
Speaker 1: ability to swap between native cryptocurrencies. Sexes effectively let you

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00:42:30,760 --> 00:42:34,800
Speaker 1: trade whatever cryptocurrency you want, whereas most DEXes only allow

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00:42:34,840 --> 00:42:38,040
Speaker 1: you to trade between tokens on a single blockchain. This

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00:42:38,480 --> 00:42:42,000
Speaker 1: is not ideal, as some trades require multiple DEXes and

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00:42:42,239 --> 00:42:44,960
Speaker 1: cross chain bridges. The good news is that there are

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00:42:45,120 --> 00:42:48,080
Speaker 1: crypto projects like thought chain, which make it possible to

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00:42:48,120 --> 00:42:54,359
Speaker 1: swap cryptocurrencies natively between blockchains. These technologies are still very

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00:42:54,480 --> 00:42:57,399
Speaker 1: much in their infancy, but I could see an order

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00:42:57,480 --> 00:43:00,440
Speaker 1: book based cross chain decks being built by the end

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00:43:00,560 --> 00:43:03,759
Speaker 1: of the next bull market. And finally, there's the on

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00:43:04,080 --> 00:43:07,799
Speaker 1: and off ramps. The biggest advantages that sexes have over

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00:43:07,960 --> 00:43:11,600
Speaker 1: DEXes is arguably their ability to let users cash out

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00:43:11,960 --> 00:43:15,520
Speaker 1: into filthy feared. Being able to easily get your money

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00:43:15,640 --> 00:43:18,960
Speaker 1: in and out of crypto is of paramount importance, and

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00:43:19,239 --> 00:43:22,839
Speaker 1: it's something that DEXes haven't yet managed to do due

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00:43:22,880 --> 00:43:25,920
Speaker 1: to all the regulations involved. The good news is that

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00:43:26,040 --> 00:43:28,480
Speaker 1: it should become easier to get your money in and

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00:43:28,680 --> 00:43:32,359
Speaker 1: out of crypto once it becomes more widely held. Peer

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00:43:32,440 --> 00:43:35,880
Speaker 1: to peer crypto marketplaces were and continue to be something

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00:43:35,920 --> 00:43:39,680
Speaker 1: associated with privacy obsessed cipher punks, but they could become

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00:43:39,920 --> 00:43:44,000
Speaker 1: very common as crypto adoption increases in some I am

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00:43:44,120 --> 00:43:47,799
Speaker 1: confident that DEXes will displace sexes in the coming years.

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00:43:48,280 --> 00:43:51,600
Speaker 1: I reckon this will be accelerated by crypto regulations, which

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00:43:51,640 --> 00:43:55,960
Speaker 1: will only be enforceable against centralized elements of the crypto industry.

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00:43:56,280 --> 00:43:59,960
Speaker 1: The truth is that all centralized elements must be removed

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00:44:00,440 --> 00:44:03,040
Speaker 1: for this to be called crypto. Take a second to

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00:44:03,080 --> 00:44:07,200
Speaker 1: consider that it's the centralized entities which have historically caused

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00:44:07,360 --> 00:44:11,160
Speaker 1: and continue to cause all the issues in the crypto industry.

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00:44:11,760 --> 00:44:14,400
Speaker 1: It's part of the growing pains, and it is in

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00:44:14,480 --> 00:44:18,120
Speaker 1: fact something that the crypto industry should eventually grow out of,

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00:44:18,800 --> 00:44:22,520
Speaker 1: otherwise we'll end up with more of the same. After all,

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00:44:22,840 --> 00:44:25,200
Speaker 1: what f t X and Alameda we're doing is no

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00:44:25,480 --> 00:44:29,400
Speaker 1: different from what banks do today. The only differences the

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00:44:29,520 --> 00:44:32,200
Speaker 1: banks get bailed out by the central banks when they

691
00:44:32,440 --> 00:44:36,360
Speaker 1: lose all their clients money speculating on risky assets with leverage.

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00:44:36,840 --> 00:44:39,799
Speaker 1: The crypto companies who do this just go under, as

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00:44:39,920 --> 00:44:44,400
Speaker 1: they should. Stronger crypto companies rise to replace them, however,

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00:44:44,600 --> 00:44:48,040
Speaker 1: until their flaws are found and they collapse too. And

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00:44:48,400 --> 00:44:52,080
Speaker 1: with each iteration, the crypto industry moves closer to its

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00:44:52,160 --> 00:44:55,520
Speaker 1: core values because that's all that's left when the greed

697
00:44:55,680 --> 00:44:59,600
Speaker 1: and gains are gone. It will take time, but one

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00:44:59,680 --> 00:45:02,759
Speaker 1: day we will no longer have to trust. We will

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00:45:03,120 --> 00:45:07,840
Speaker 1: simply verify. And that's it for my video today, folks.

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00:45:07,880 --> 00:45:10,040
Speaker 1: But I'm keen to get your feedback, though. Do you

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00:45:10,200 --> 00:45:13,160
Speaker 1: trust these proof of reserves? Let me know down below

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00:45:14,160 --> 00:45:16,399
Speaker 1: if you wanted to use any of the exchanges above,

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00:45:16,480 --> 00:45:19,000
Speaker 1: I've managed to get special trading feed discounts of up

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00:45:19,080 --> 00:45:21,920
Speaker 1: to on some of them, so if you want to

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00:45:21,960 --> 00:45:25,680
Speaker 1: take advantage of that, they're linked to in the description below. Now,

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00:45:25,960 --> 00:45:29,000
Speaker 1: of course, we also get a commission when you do this,

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00:45:29,320 --> 00:45:31,560
Speaker 1: because it's how we keep the lights on here and

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00:45:31,920 --> 00:45:35,359
Speaker 1: we both benefit or You're more than welcome to sign

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00:45:35,440 --> 00:45:38,120
Speaker 1: up directly without our deal, and the links to do

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00:45:38,280 --> 00:45:42,560
Speaker 1: so are down below as well. Just remember, whatever you do,

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00:45:43,040 --> 00:45:46,759
Speaker 1: don't leave a large amount of funds on the exchange.

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00:45:46,960 --> 00:45:51,040
Speaker 1: It is not worth the risk. Thank you so much

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00:45:51,120 --> 00:45:53,880
Speaker 1: for listening to the coin Bureau podcast. If you'd like

714
00:45:54,000 --> 00:45:57,280
Speaker 1: to learn more about cryptocurrency, you can visit our YouTube

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00:45:57,360 --> 00:46:00,719
Speaker 1: channel at YouTube dot com forward slash coin Burero. You

716
00:46:00,760 --> 00:46:03,280
Speaker 1: can also go to coin bureau dot com for loads

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00:46:03,320 --> 00:46:06,000
Speaker 1: more information about all things crypto. You can follow me

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00:46:06,080 --> 00:46:08,960
Speaker 1: on Twitter at at coin bureau or one word, and

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00:46:09,239 --> 00:46:12,040
Speaker 1: I'm also active on TikTok and Instagram too.