Their terms of service didn't give them the right to do this, as I understand it.

> None of the Digital Assets in your Account are the property of, or shall or may be loaned to, FTX Trading;

Because actually the idea is that instead of relying on some third party to follow some words on paper, you trust math and computer science. You don't need the third party at all for most things, just use you own cryptocurrency wallet.

For more complex things, we can use smart contracts, which are not based on trust but actual math. The program being on-chain literally makes it impossible for them to misappropriate funds (at least without the details being in public and reviewable beforehand).

I couldn't make this up!

As for the "smart contracts", nobody who is familiar with programming bugs would want there not to be better checks and balances there. The depressing frequency of 8 figure hacks of the terms of said contracts is a concrete demonstration of this principle. Thanks, but no thanks in anything like its current state.

For most users, traditional finance is faster, cheaper, and safer in practice than crypto. Which is exactly why the main use cases for crypto are speculation, money laundering, and various illegal activities like paying ransoms for ransomware attacks.

There is constant abuse of customer funds, as a matter of course, by banks. It generally is less public or visible though than public ledgers (blockchains).

Its the difference between trusting a company that is trying to profit just from holding your funds in ways that you cannot audit, versus trusting a math and computer programs that you can audit.

There have not been more abuses by cryptocurrency exchanges than banks overall. They are just more recent. But what I am saying is that these cryptocurrency exchange companies really don't have anything to do with cryptocurrency -- their business model is antithetical.

Likewise we have had to rely on banks to control digital money since we did not have a good alternative. And now there are many regulations and compliance officers etc. dedicated to preventing people from cheating, stealing, or irresponsibly using customer funds.

But at the core level the problem is that these the bank ledgers are secret, difficult to verify or connect together for tracing purposes. Cryptocurrency means using math and computer science to solve these types of problems in a holistic way.

Like everything else, people have abused this technology (such as using it to sell services that are antithetical to the core concept). But that doesn't mean they aren't important advances.

There wouldn't be anything inherently wrong with it 1) if they didn't do it by default 2) if banks informed their customers appropriately, including the risk in doing that (most people don't know what banks do with their funds) and especially 3) if it wouldn't be forced, i.e. if they would let customers choose to keep their funds segregated if they are not willing to take the inherent risk in lending and/or the bank mismanaging their funds (e.g. having the option to have both segregated and normal checking/savings accounts or whatever), so that customers would never be exposed to losing whatever amount they didn't want to (including anything above the FDIC insured amount).

But sure, allow customers to lend their money and expand the economy if they want to. With an appropriate reward for the risk, not a laughable 0% interest rate, which almost nobody would ever take willingly. In fact, the 0% interest rate, or anything below or close to the inflation rate, is a clue which indicates that what they're doing to their customers is wrong and that the customers aren't choosing to take that risk knowingly and voluntarily.

> There are a mountain of regulations that banks have to keep up with and the reason why FDIC insurance exists

You say that like it's a good thing. It's massively inefficient and both "a mountain of regulations" and FDIC insurance are inherently unfair (for several reasons) and have many unintended (negative) consequences.

And it doesn't even actually fix the problem, it just makes it less likely to occur (for starters, because there ends up being much less competition than there would be otherwise -- less banks, less bank failures) but when it occurs, it's an even bigger problem. Which means it also gives a false sense of security.

Credit cards also offer this. I can go to my CC's website and generate virtual cards which can be handed to vendors and individually managed, frozen, or deleted, all without exposing my actual card number.

Still harder and not as secure as a digital signature.

> Furthermore, I'm not worried about a virtual card being exposed to unauthorized charges, because (unlike in cryptocurrency-land) chargebacks exist.

You're not guaranteed to perform a chargeback successfully. And both vendors and customers (like you) are paying for that "service".

Chargebacks are also one of the reasons for why there is large-scale credit card fraud. And it is also why vendors are incentivized to collect personal information from you (to detect fraud before chargeback happens, for which they are greatly penalized) and why they are also incentivized to refuse service to legitimate customers in many cases (due to flagging legitimate transactions as suspicious).

Worse, when they refuse service they cannot even tell you why (as that would help fraudsters).

Even in the worst case, because a credit card is an abstraction over my bank account, I have the option to refuse to pay and won't lose my shirt or otherwise become despondent. In the meantime, chargebacks are a feature of the system, not a bug. To wit, cryptocurrency advocates are the last people who should go around lecturing others about fraud. :P

That may also have unintended consequences for victims of credit card insecurity.

> To wit, cryptocurrency advocates are the last people who should go around lecturing others about fraud. :P

Why not? Cryptocurrency advocates know a lot more about it than most people (for good and bad reasons).

> Since token approval requests usually ask for unlimited access to your token balance, if there is a security vulnerability, all of the assets in your wallet could be exposed. Depending on how severe the security vulnerability is, disconnecting your wallet from a dapp may not be enough to fully protect your assets.

https://help.coinbase.com/en/wallet/security/dapp-permission...

Such as the fact that most of these cryptocurrencies are totally impractical to use for actually buying things, leading to the need to use centralized exchanges for swapping to fiat.

And the fact that there are multitudes of competing cryptocurrencies. And that there is a fundamental lack of integration with government due to government actually needing to radically reform and advance to incorporate cryptocurrency.

But still, they are core advancements that society should take advantage of. Easier said than done.

No, it's pretentious BS used to make more riskier, assymmetric gambles.