Quote from: pascal257 on January 16, 2018, 09:57:39 PM

Quote from: crypt0dude on January 15, 2018, 01:54:01 PM

There are no crypto exchanges registered with FSCS, that's the problem. Only top forex brokers located in the UK, but you need to check that to be sure and have it black on white in paper.

I don't think Bistamp is liquid to handle huge amounts of withdrawals and probably not even solvent to do so. That's my opinion based on what has and still is going on and basic math + common sense.
Let's say, in theorem, that Bitstamp or any other crypto exchange has users that have 50% of Bitcoins mined and 50% - 1 are bought for $1. Now the last guy buys the bitcoin for $20k. The market cap of bitcoin rises to supply * last traded price. Let's say, supply of 17 million bitcoins and let's assume Bitstamp had a monopoly where all users will go to buy/sell bitcoin and have their entire account equity (deposits) used.
To use some simple arithmetic:
Bitstamp client deposits: 17m * 0.5 * $1 + 1 * $20k = $8.5 million + $20k = $8,520,000 ($8.52m)
Market cap from: 17m * $1 = $17m, to: 17m * $20k = $340,000,000,000 ($340b)

As you can see, the only way this is sustainable is that more people get in and buy around the same last price to maintain that market cap. Problem is, if price rises too fast vs their earnings from fees + third party capital investments + own equity AND people withdraw huge amounts at the same time(period), crypto exchanges cannot pay you out (i.e. a bank run). Unfortunately, most things rely on a ponzi scheme/pyramid structure in life. The only one who can 100% guarantee it to pay out is the central bank. If they don't have enough fiat, they just print or put more digits in.
Things will really go south when theft occurred (i.e. a hack). Not implying this has happened, just having an open mind and mature discussion here.

As the top forex brokers offering you an insurance in case things go wrong, I don't think they will for cryptos if this continues without new big money coming in, while people cashing out. Therefore, there are only 3 crypto money licensed transmitter exchanges, where there could have been many more crypto fiat exchanges, ask yourself why this didn't happen. I know coinbase and kraken have huge reserves and bistamp had a lot of liquidity as well in the past, that's why everything went so smooth for years. But, when suddenly withdrawals and deposits don't go smooth and it's still not solved within a week, I'm worried and that's my argument. The same thing happens in the business world, hence the stalling of time.

Bullshit meter over 9000 here.

Elaborate. You know how basic accounting works? If yes, explain in technical detail how an audit works and how this is sustainable, especially when one can short.
Oh wait, you can't, otherwise you would have commented back with a constructive argument, which you have none of.

EDIT:
I only agree that my example is confusing, as it did lack information (thought you would figure that out yourself if you could critically think). With shorting, you are on margin. With leverage, the situation can be much worse.
If one could think, one could see the reason why USD Tether was created (you get my point of central banking, i.e. creation out of thin air, yes?). Don't assume everyone is 100% in crypto. Basic and essential questions like disclosure of financial statements in times of withdrawal problems are 100% valid. Not hard at all, is it?