Thread by @patrick_novum

When is a #dollar not a #dollar?

Should the dollar in your bank account be qualitatively different than the George Washington in your wallet?

Even if the denominations are the same?

Even when it comes to the fiat currency that we're used to, it can be argued that cash in the hand "feels" different from the money we have in our bank accounts.

But their effect is the same.

Outside of the first US$250,000 in FDIC insured deposits, everything else is risk.

When @binance started minting $BUSD on the #Binance Chain (now called BNB Beacon Chain) and the Binance Smart Chain (now called BNB Smart Chain) no one really peeked beneath the hood to see that these were QUALITATIVELY different from the $BUSD associated with @PaxosGlobal

And that's because no one really saw the qualitative difference between the two, because #blockchain money is blockchain money no?

Except that it's not and when @DataFinnovation peeked beneath the hood it was shocking what it found.

Orange line represents Paxos-linked $BUSD on Ethereum intended to back the equivalent $BUSD circulating on Binance Smart Chain.

Green line is the $BUSD that was circulating on Binance Smart Chain that ought to have been backed by the equivalent on Ethereum.

It was all very clever, $BUSD on the Binance Smart Chain (BNB Smart Chain) was regularly undercollateralized by the Paxos white-labeled $BUSD on #Ethereum.

And because nobody could tell the qualitative difference, no one was the wiser and to be fair, this particular grift is not new.

In the #1MDB fraud, companies were set up with similar sounding names to receive monies.

#HushPuppi the infamous #Instagram scammer did the same thing.

bbc.com/news/world-afr…

What makes the @binance grift so interesting is that @PaxosGlobal even came out to clarify the qualitative difference between $BUSD issued on Ethereum and $BUSD issued on Binance-related blockchains.

A bit late but better than never eh?

paxos.com/2022/04/07/bus…

And that is when a dollar isn't a dollar.