I don't know about FTX, but Binance has been shady from the very beginning. They got large quickly because they listed all kinds of **coins, had negative trading fee promotions, and in general did lots of shady growth hacking marketing tactics and partnerships. If you wanted to gamble altcoins, those would be on Binance, but not listed on Coinbase. That was many years ago when they started out of course. I'm curious where they are today. In my mind, the shady image of Binance hasn't changed, but maybe they got lucky with their investments and are actually fully backed and profitable now. Who knows...
Coinbase used to be US-only, and is still very US-centric. Binance and FTX are international. They only opened US exchanges later, but they are separate, and tiny compared to their international footprint.
I'm also curious how FTX got so big. When they started, the market seemed saturated with exchanges already, and they didn't really have differentation.
I guess it goes to show even in the face of all the scams there remains a massive appetite for [seemingly] legit markets to buy/sell coins. Boggles my mind these idiots can't simply be satisfied to run a profitable, lawful operation.
Chances are those satisfied people exist, but you never hear of them because they never left bootstrapping territory. Honesty, modesty and getting investment, you can pick at most two. Because telling a would-be investor "I'll be happy breaking even" is equivalent to openly announcing that you'll steal their money.
I think the issue was they were creating the market for these *coins.
The reason people wanted to gamble in these alt coins is the wild returns. These returns would not have been possible if these business had operated as a lawful like gambling operation.
Still get emails from Binance constantly: "Earn 3.6%/3.9%/4.1% when you stake ... FTM/ONE/ROSE". Just scrolling down, they offered 15% on DOT back in August!
They offered this because it’s the staking reward the Polkadot network rewards for staking your coins. Binance just offers you to stake with them and in turn gives you part of the rewards. The 15% are paid in DOT though, so your dollar return is dependent on DOTs performance.
An interesting observation: first people get used to trusting e.g. Coinbase, in the slow, organic way of trust to grow, then they see a similar company, the brain does that category drawer game and suddenly the new company gets trust by similarity. Certainly not the full amount but a much better start than the first one had. I wonder if there's already a term for that? What's even the field where these observations would be collected?
Coinbase used to be US-only, and is still very US-centric. Binance and FTX are international. They only opened US exchanges later, but they are separate, and tiny compared to their international footprint.
I'm also curious how FTX got so big. When they started, the market seemed saturated with exchanges already, and they didn't really have differentation.