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Re:Crypto lending company Babel Finance halts redemptions an... by Majromax on Friday June 17, 2022 @09:28AM (#31777837)
> Banks are forced to abide by regulations and laws dictating how fractional-reserve organizations are allowed to operate. In return, peoples' deposits are backed by the government up to $250k (in the US).

Depositors also have first claim against assets in insolvency, so even uninsured accounts will be paid back before bondholders or equity owners. Even a well-intentioned crypto security has no such strict prioritization.

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