Why let depositors in the US banking system lose capital when there's an insurance fund covered by the banking system itself for this purpose? The investors in SVB lost everything, isn't that accountability enough? You really want businesses with payables and payroll that exceed the FDIC limit by millions to be exposed to risk for relying on the US banking system, to what end, why?
Because this isn't the purpose of that insurance fund. Its purpose is to cover insured deposits, and these are uninsured deposits.
I'm very open to ideas about how to change the program to better support businesses on the large side of small or the small side of medium. I think raising the insurance limit, maybe conditioned on payroll size or something, and thus also raising the insurance premiums, seems like an idea that makes a ton of sense.
But that wasn't the rule on Friday, and it wasn't what the premiums historically charged to banks to build up that insurance fund were priced for. And it's especially rich that banks (like SVB!) have long lobbied to keep those premiums low, and now want to benefit from suddenly switching the insurance policy to be unlimited. It's like if I constantly pushed to keep my home insurance premium low with the trade-off that they would only cover part of my losses in a fire, and then after a fire I made a big stink about how my insurance company should cover an unlimited amount of my costs to rebuild.
This is the second time in my life now that I've woken up to find that I'm being held hostage by banks essentially saying to my government "nice society you have there, it would be a shame if something were to happen to it...".
They're right, we do have to bail them out, but it's bad that this is the case.
There are plenty of necessary reasons for business to have money in accounts above $250k. There should be no exposure here, this is the US banking system - bank deposits should be guaranteed by the entire system (not the taxpayer). Let the shareholders burn, fine... but cmon man, what does anyone get by letting depositors lose capital when placed in US banks?
> There are plenty of necessary reasons for business to have money in accounts above $250k
Sure, and they know what's insured and accept those risks.
> There should be no exposure here
Bullshit. There's a gradient here: There are some depositors who have $750k and others who have many millions. What many of them (the latter group) were doing here is simply bad financial practice. I have to do better with my personal finances. Why don't they, too? Because more people depend on them? That's pathetic, they should do better because people depend on them.
And let's not pretend like they don't have options. They do. The individuals (corporate officers) losing money here (hypothetically, since they're going to be made whole) are supposed to be competent leaders. They're showing the world their asses.
Many employees had all their 401k tied up in enron too.. They were heavily encouraged by the employer, and it saw great gains for years. Doesn't mean that they should ignore financial advices and diversify to reduce risk...
The same place that took trillions of dollars in exchange for low-yielding treasury bonds. The same place that effectively devalued said treasury bonds when they decided to rapidly raise interest rates.
The consequences are the reduction of billions in shareholder value, and we shouldn't be dumb about doing anything that reduces confidence in US banks. SVB shareholders will be down from like 60 bln mkt cap during the pandemic to a good fat 0.
Of course if those banks are depositing to the same 10 banks then you're really protected at 10x...but, well much better than 250k? I'm going to guess it's called a "Sweep Program" but I'm no finance expert. I know of this because it's common for brokerage account to do this - as very often, you'll have more than $250k in cash if you're doing active trading.
You don't need the FDIC, lodge your money directly with the US government.
Let's say you earn your income 28 days before you have to pay out wages (for illustration purposes). You buy a 28 day Treasury bill which matures in time for you to make payroll. Even if they're paid into a bank account you're taking a lot less risk having money sit for a day than continuously. You also earn a little interest.
Yes, the limit seems especially poorly-suited to businesses.
Though, there do exist meta-banks that split funds across multiple other bank accounts in order to achieve higher FDIC limits. Maybe we'll start seeing more of these.
Otherwise, I think the FDIC needs to revise the rules.
I suspect that any cloud provider has enormous amounts of fraud on it and no tooling is 100% error free. It's also important to note that GDPR has specific exemptions for companies responding suspected security/fraud related issues.
I love DO because the performance for the price is great. Also have no issue supporting emerging tech companies with cultures I connect with.
No question fraud exists on all these platforms, however, if anyone is wrongly flagged by an algorithm, reaching out to the company must be followed by a prompt and timely response, so any misfortune can be remediated. I would assume fraudsters wouldn't typically reach out to have their accounts reinstated.
In the digital age, startups and businesses rely on cloud providers for their livelihood. These providers must be reliable and trustworthy, otherwise they shouldn't get a penny.
Also, I'm not intimately familiar with OP's situation, my comments are just common sense generalizations; I think!
We have an entire fraud and safety team whose sole purpose is to deal with these situations. Every account that is flagged is notified. Every account is communicated with and there are always replies sent. Unless a droplet is actively being malicious, such as sending out a DDoS attack, or performing some other sort of determined malicious activity, there is absolutely no interruption in service. The account is locked so that the account can not create more resources, but there is no disruption to the underlying running resources such as droplets and otherwise. The intent here is to establish a dialogue with the user and determine if the activity is fraudulent or otherwise.
Thanks for chiming in. I’m very pleased to see you engaged with your customers/potential customers; especially in a high stakes community such as HN.
I’m not going to comment any more on this situation as I don’t know all the details, I do hope I won’t see comments of unhappy DO customers on HN in the future, as that would be a sign you guys are not up to expectations.
P.S. I have been a happy DO customer for years; thus far (:
GDPR does not have specific exemptions for fraud. It is often possible to process personal data for anti fraud purposes but it requires a full legal assessment in the same way as any other processing activity would.
"This Amended and Restated Incentive Stock Option Letter Agreement (this "Agreement") amends and supersedes paragraph 2(c) of the Employment Agreement between you and the Company dated October 24, 1994, regarding the grant to you of a stock option (the "Option") for the purchase of 709,568 shares (the "Option Shares") of the Common Stock of Amazon.com, Inc., a Delaware corporation (the "Company") at an exercise price of $.001471 per share (reflects stock split effected on November 23, 1996)."
A lot of people would haved bailed during the dot.crash of 2000. Amazon lost was high flyer and lost over 80% of peak value. Who knew it would become atop ten most valuable company.
"This Amended and Restated Incentive Stock Option Letter Agreement (this "Agreement") amends and supersedes paragraph 2(c) of the Employment Agreement between you and the Company dated October 24, 1994, regarding the grant to you of a stock option (the "Option") for the purchase of 709,568 shares (the "Option Shares") of the Common Stock of Amazon.com, Inc., a Delaware corporation (the "Company") at an exercise price of $.001471 per share (reflects stock split effected on November 23, 1996)."
