You're right, we don't have to trust them, because we know we cannot trust them. Regular banks are not keeping your money ready for you to withdraw. They are investing your money (the profits are for them, the losses are for the taxpayers), while they hope that not everyone want their money at the same time. Binance is accused to mix customer funds with their own funds. If it were a bank, that would be essentially a given. Not necessarily defending Binance, but ...
I don't think any modern (post-1600AD) bank ever just kept depositors money ready for withdrawal.
Mixing shareholder equity with depositor funds is a totally different thing. In general, depositors are a bank's most senior creditors (they get money before the electric bill gets paid) and shareholders are the least senior (they only get money after ever single other bill is paid). Mixing these funds makes a mess of that promise and should rightfully reduce trust that Binance would be willing or able to pay depositors in a crisis.
I'm not sure you read the article, it's not about shareholder equity...
> I don't think any modern (post-1600AD) bank ever just kept depositors money ready for withdrawal.
I'd have thought it was a more modern issue, but let's agree. And that seems in any case perfectly fine for most, or at least for many people. Incidentally, playing with customer money was what FTX has been doing, albeit it was amateur, no official oversight, ...
