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Binance Promoted Terra as 'Safe' Investment Before $40 Billion Collapse (ft.com) 64

Posted by msmash from the closer-look dept.
Binance promoted terraUSD as a "safe" investment just weeks before the stablecoin and its counterpart luna collapsed in a $40bn wipeout that shook the crypto industry. From a report: The world's biggest crypto exchange advertised on April 6 an investment scheme in which clients lend out their terra to earn a yield of almost 20 per cent as a "safe and happy" opportunity, according to a message Binance sent on its official channel on the Telegram messaging app. Terra and luna, a set of linked digital tokens, were popular with crypto traders seeking to earn high returns through lending programmes known as "staking," but lost nearly all of their value earlier this month in one of the crypto industry's biggest-ever crashes.
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Binance Promoted Terra as 'Safe' Investment Before $40 Billion Collapse More

Binance Promoted Terra as 'Safe' Investment Before $40 Billion Collapse

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  • Crypto good! (Score:4, Informative)

    by splutty ( 43475 ) on Monday May 23, 2022 @04:46PM (#62559490)

    Crypto good! As said by other CryptoGoodBros!

    This feels incredibly like laundry detergent commercials, with about the same believability.

    • Re: (Score:1)

      by Anonymous Coward
      all-cryptocurrency-should-die-in-a-fire [currentaffairs.org]

    • Crypto good! As said by other CryptoGoodBros!

      This feels incredibly like laundry detergent commercials, with about the same believability.

      But crypto is good for washing certain intangible things. Just be careful when you finally pick them up.

    • Re:Crypto good! (Score:4, Funny)

      by RonVNX ( 55322 ) on Monday May 23, 2022 @07:50PM (#62559994)

      "In this Ohio diner, we spoke with five Ponzi scammers who despite all evidence to the contrary, seem convinced you'll stay poor only if you don't invest your life's savings with them." - New York Times

    • There is no such thing as "Safe Investment".
      It's a myth.
      It. Does. Not. Exist.

      HAHAHAHA "Safe Investment"

    • Crypto good!

      You need to qualify that:

      Crypto good! [*]

      [*[ Good in this context refers specifically to drug dealing, CSAM, ransomware, and securities fraud, no other claims are made. Void where prohibited. No representation or warranty, express or implied, with respect to the completeness, accuracy, fitness for a particular purpose, or utility of these materials or any information or opinion contained herein. Actual mileage may vary. Prices slightly higher west of the Mississippi. All models over 18 years of age. No animals were harmed

    • Re: (Score:2)

      by mjwx ( 966435 )

      Crypto good! As said by other CryptoGoodBros!

      This feels incredibly like laundry detergent commercials, with about the same believability.

      Nothing like laundry detergent... I mean they actually do what they're meant to.

  • WTF? (Score:5, Insightful)

    by haggie ( 957598 ) on Monday May 23, 2022 @04:52PM (#62559512)

    No **legitimate** business has ever offered a guaranteed 20% return on investment.

    • Re:WTF? (Score:5, Interesting)

      by onefriedrice ( 1171917 ) on Monday May 23, 2022 @05:23PM (#62559622)
      The vast majority of crypto coins and tokens are obviously securities, with a few notable exceptions. If the SEC has any useful purpose, it should be to actually regulate these.

      • Re: (Score:2)

        by vlad30 ( 44644 )
        So who has the $40B or the cash put in by "investors" as the $40B is likely the inflated figure for clickbait. When I first heard about crypto I thought Ponzi scheme, and the best kind it didn't even pretend to have a real product.

    • Indeed. Safety and yield are inversely proportional - people demand higher yields in exchange for higher risk, are willing to accept lower returns for lower risk.

      A very safe investment for just one year pays about 2%.
      https://www.marketwatch.com/in... [marketwatch.com]

      That's safe in the sense you can be virtually certain you'll get your 2% as well as your principal, and you'll get it on time.

      At the more risky end of a still safe investment, a mutual funds that consists of General Mills, International Paper, and 198 ot

    • Re: (Score:2)

      by stikves ( 127823 )

      US growth is about 4% on average.

      Anything more means being selective.

      SP500 has an annualized growth rate slightly above 10%. They achieve this by selecting only the top 500 companies (literally in the name).

      Some very good private firms, might achieve 20% in **good market** times, but they are known to crash. And crash really hard: https://www.investopedia.com/t... [investopedia.com] (having Nobel winners did not help either).

      Take this as a yard stick.

      If anyone is offering "guaranteed" returns, it will be less than 4%, or is a

      • US growth is about 4% on average.

        In some earlier (probably cherry-picked) era. The average for 1948 to 2022 is only 3.14% and that includes the greatest boom period in world history. The average economic growth rate has been declining for decades, and in each of the two previous decades averaged 2%.

      • This is actually one of the great investment secrets. Virtually nothing outperforms the S&P500 over time... virtually nothing INCLUDES the parties that think they have a system of investment hopping amongst things currently outperforming the S&P500. It includes AI/algorithm trading, chart analysis, etc etc etc.

        For a limited 'startup' duration small businesses do drastically outperform this, sometimes with many multiples of growth year over year. Bitcoin is an example of this. Eventually those things

    • Re: (Score:2)

      by Arethan ( 223197 )

      Sure they do. They're called payday loans, and they're about as legitimate as a loan shark can get.

  • on the whole "crypto-coin" craze. At first I blew it off as an amusing mental exercise. Then all the easy coins were mined and further coins needed a video card (not being a gamer...I didn't have) then you needed ASICs (a further delay) and so forth.

    Day late and a dollar short, so I blew it off as a missed opportunity.
    Well it seems that wasn't such a bad thing after all, given the complete implosion of the whole idea...

    • Re: (Score:2)

      by znrt ( 2424692 )

      well, maybe a missed opportunity to make a buck out of the hype. that's a bad thing if that is your thing and you didn't go for it, assuming you would have pulled out early enough, which you now will never know. lots of people have done indecent money with this crap. it isn't a missed opportunity for me because i would have never bothered.

      however you still have time if you are really interested. don't believe this is a "complete implosion". bipolar worldview is just part of fud culture. even if this is a ma

    • You missed nothing but the feeling of being "in" right before "in" turns to shit. I almost sorta thought Enron was a good investment once just like crypto, which tells of my investment talents. Don't play in the shark tank.

    • Not all cryptocurrency needs a ASIC. There are cryptocurrencies designed to be mined on a CPU that are GPU resilient (they use random algorithms) such as Monero (XMR), etc. Back in Nov, 2021 Raptoreum (RTM) [tomshardware.com] was being shilled.

      You didn't miss anyone excepting wasting some money into something that was essentially gambling [youtube.com]. You basically HODL and hope that it has a run before pump and dump.

      You probably could have bought stocks and you would have been ahead. /s

  • Lay down with dogs... (Score:5, Informative)

    by waspleg ( 316038 ) on Monday May 23, 2022 @05:04PM (#62559562) Journal

    get up with fleas... [wikipedia.org]

    In 2021, Binance shared client data, including names and addresses, with the Russian government.[7] ...

    United States

    In 2019, Binance was banned in the United States on regulatory grounds. In response, Binance and other investors opened Binance.US, a separate exchange registered with the United States Financial Crimes Enforcement Network and designed to comply with all applicable US laws.[40] The US variant has been praised for offering a very similar interface and feature set to its worldwide counterpart. However, it is banned in seven states.[41] In May 2021, Bloomberg News reported that Binance was under investigation by the United States Department of Justice and Internal Revenue Service for money-laundering and tax evasion.[42]
    United Kingdom

    In June 2021, Binance was ordered by the UK's Financial Conduct Authority to stop all regulated activity in the United Kingdom.[43][44] In January 2021, the FCA began requiring firms dealing with cryptocurrency to register in order to comply with anti-money laundering rules. As Binance is not compliant with these rules, it is being forced to cease operations within the coming weeks.[citation needed][may be outdated as of January 2021]
    Japan

    On June 25, 2021, Japan's Financial Services Agency warned Binance that it was not registered to do business in Japan.[45] This was the second notice Binance received from the FSA. Previously, a similar warning was issued on March 23, 2018.[46]
    Thailand

    Thailand's Securities and Exchange Commission filed a criminal complaint against Binance on July 2, 2021, "for commission of offence under the Emergency Decree on Digital Asset Business B.E. 2561 (2018)". Additionally, Thailand's SEC cited Binance for operating without a license, a violation of Section 26 of the Digital Asset Businesses Emergency Decree.[47]

    The page isn't that long, and mostly filled with the kind of insalubrious chicanery you can expect from this space.

    • Wow, I should mod you Informative, but you really deserve a mod up +1 Vocabulary. That was the best use of "insalubrious chicanery" I've ever seen.

      • Re: (Score:3)

        by waspleg ( 316038 )

        lol, thanks. I couldn't decide which was more fitting so, I went with both. I also just had google messages try to correct a mexican food order with the word magniloquent [merriam-webster.com], so I got to learn a new one for being a pompous asshole, to file away for later.

      • Tell the truth. That's the ONLY use of that phrase you've ever seen. Like me telling my only daughter she's my favorite daughter.

        • Well I've spent time in the Society for Creative Anachronism, so I'm quite used to loquacious logophilic ignoramuses.
          • That was perhaps harsh; to be fair to my SCA friends, many of them are quite intelligent and very pleasant people. Just people with complex vocabularies who tend to skip using one word when 10 will do.

    • insalubrious??? Who talks like that???

      Incidentally, I solidarize with you on the abjuration of Binance. Their asservations are not verisimilitudinous.

  • So in 2008 there were these things where they'd bundle together a lot of subprime mortgage debt, assuming a default on one was statistically independent of a default on another, and sell the result as a low-risk high-interest investment. History records the result. And those were given the green light by major credit rating agencies.

    Here we have something being marketed as a safe investment by somebody with far lower credibility than those agencies who suggested CDOs were a safe bet.

    • And yet... they probably have more credibility than anybody else in crypto. Unless you're Hari Seldon there's no way to model how a million panicky traders are going to behave.

  • Stay away from centralized VC shitcoins (Score:4, Interesting)

    by allcoolnameswheretak ( 1102727 ) on Monday May 23, 2022 @05:13PM (#62559586)

    There are many sharks in the crypto pond, and many of these are VC (venture capitalist) funded, centralized coins with large insider coin allocations. Most of these guys are selling their crypto to retail, who buy it directly from them. Most of these are built with a generic framework like Cosmos SDK, using shoddy technology, no innovation, shaky foundations, they are only in it for the money. When everything comes crashing down, like with Terra/Luna, retail is left holding the bags and a few people got very rich.
    Stay away from these projects. Learn to recognize them by their coin distributions:
    https://www.reddit.com/r/ergon... [reddit.com]

    A few examples of these VC centralized shitcoins:
    * Terra/Luna (crashed and burned)
    * Solana
    * Avax
    * Binance Smart Chain
    * Internet Computer
    Many of these projects support each other, because they frequently have the same money pulling the strings in the background. Also, they are frequently highly shilled and promoted since the VC money is paying of influencers to talk and promote their coin.

    Real crypto projects, with good decentralization, fair public coin distributions and built on solid technical foundations are:
    * Bitcoin
    * Ethereum
    * Cardano
    * Ergo

    More info:
    https://www.thestreet.com/cryp... [thestreet.com]

    • Crypto markets are basically like that movie speed right now or if they drop below a certain threshold they collapse. That's because a couple of huge investors have set it up so that if Bitcoin drops below a certain threshold they sell off all their assets.

      Right now the market is struggling to keep Bitcoin above those thresholds, which are around 25,000 and 21,000 depending on the investor in question. So basically the whole market is like Keanu Reeves trying to keep the pedal to the metal because if th

      • I read that somewhere around 25K to 30K is the price at which Bitcoin miners have to sell in order to stay profitable, which is why it seems to be a price floor at the moment.

        • But from what I understand the 'mining' price depends on how much effort is being put into mining - less effort and future mining will be cheaper (easier).

          So the price floor is only here for as long as people don't start giving up, at which time this inverse supply/demand situation will reduce the price floor.

    • Re: (Score:2)

      by Luthair ( 847766 )
      Bitcoin,Ethereum and probably the others also granted their creators with large holdings. Its shitcoins to the very beginning.

      • Bitcoin, no. There was insider allocation to Ethereum and Cardano as well, but look at the graphs. It was only small percentages, to fund the initial team and development to get the ball rolling until community and decentralization take over. Nothing compared to the 30% to 50% insider allocations of chains like Terra or Solana.

    • I don't agree about Solana, they're doing something different from the ethereum clones and it's interesting.

      • Look at the coin distribution of Solana. Huge allocation to insiders and almost none to the public. The blockchain is very centralized since setting up a node is prohibitively expensive requiring powerful hardware and a lot of Sol. It frequently shuts down and is restarted due to bugs and not being resistant to attacks. Also, all the same social media influencers who were raging about Terra/Luna are the sames who keep talking about Solana. So many red flags.

        • I'm not really interested in coin distribution or holding it though, I'm interested in what you can do with it. I think you're looking at crypto from a very focused lens. I also think you're missing the point on Binance Smart Chain and some of the ETH clones. If you are actively trading you should absolutely be trading there instead of Ethereum because: 1 you will save tons of money on gas, and 2 you are saving the environment (until Eth merge is complete at least)
    • I have been playing penny stocks for 30yrs, also into physical silver, gold being that I live in the center of one the world's largest mining areas of Northern Ontario. What I have seen is those same sharks that mine the public with junior miners joined teams. Seriously rough water ahead for those that took those large risks, hopefully they banked their nuts away for dark times. Me I'm just comfortable idc.

  • Everything is a safe investment... (Score:4, Insightful)

    by EmagGeek ( 574360 ) on Monday May 23, 2022 @05:35PM (#62559660) Journal

    ... until it isn't.

    Gold was a great, foolproof investment until the precious metals crash of the mid 90s.

    Real Estate was considered "can't lose" until the 2008 boondoggle.

    Bonds... yeah.. look at all the principle value being lost in the bond market. US treasury prices plummeting due to rapidly rising interest rates.

    No investment is safe forever.

    • This is the exact comment I came to write.

    • The banks got bailed out though. There is a way to not lose and it's to be too big to fail.
  • In 1929 The stock market was new, unregulated, and very popular. All kinds of people who just "heard about it" plowed their life savings into it because it seemed like it was going up forever. Then in a shocking turn of events some of the bigger players checked out early causing a bunch of panic selling and darn it... there were a lot of sad and broke people. That sounds awfully familiar these days. It's almost as if any unregulated market that has billions of dollars at stake will automatically turn into a

    • In 1929 deposits weren't insured, banks could be and sometimes were wiped out. Guess in the mattress was the place to invest

  • The important thing to know about crypto, and about NFTs is the default assumption should be it's a scam. If you can't see the scam then look harder. If you still can't still see it, it's still a scam. All these crypto bros and "influencers" pushing this shit are either the ones pulling the con or more marks themselves.
  • You like sucking up all this shit?

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