Read the court filing. There's a lot of inside information from "BAM CEO A" and "BAM CEO B". These were the first two CEOs of Binance.us. They came on board thinking they had a real job. Then they discovered they were just figureheads.
"BAM CEO A" was fired. "BAM CEO B" quit after three months and started cooperating with US regulators.
"Upon assuming his CEO duties, however, BAM CEO B quickly learned that
Binance, in fact, exerted and would not relinquish substantial control over BAM Trading and the
operation of the Binance.US Platform. As he testified under oath, BAM CEO B did not “have
any firsthand knowledge of exactly what [Binance] entity managed [Binance.US Platform’s]
servers,” but he knew it “wasn’t [BAM Trading].” Similarly, he also testified that the matching
engine was “presumably owned and administered by some [Binance] entity, but I have no idea
which one, and then there’s other servers doing other functions.” He concluded, the “biggest risk
in this company is we are highly dependent on a bunch of technology that sits in Asia.”
"BAM CEO B tried to implement plans to migrate those functions and control of
the crypto assets from Binance to BAM Trading and into the United States, but Zhao quickly
overruled him, causing BAM CEO B to resign approximately three months into his tenure."
"As BAM CEO B testified, “[W]hat became clear to me at a certain point was CZ
was the CEO of BAM Trading, not me.” He further explained that he spent his first 80 days as
CEO trying “to get these core foundational things realigned,” but “was overruled on all of them”
by Zhao. BAM CEO B elaborated, “All of the things that we had previously agreed and had
worked on for 80 days were suddenly repudiated with no further discussion, and on that day, I
realized, huh, I’m not actually the one running this company, and the mission that I believe I
signed up for isn’t the mission. And as soon as I realized that, I left.”"
Former Comptroller of the Currency (and former Chief Legal Officer at Coinbase) Brian Brooks served as CEO of Binance.US for only 3 months in 2021. He makes a very credible witness!
> In one instance, the Binance chief compliance officer messaged a colleague that, “[w]e are operating as a fking unlicensed securities exchange in the USA bro.”
My theory is that Binance execs were having these chats in an encrypted medium (e.g. WA or Signal) but didn't secure themselves against a defector.
I think someone on the inside took screenshots and went to the feds (or started cooperating under legal pressure). There's even a leading candidate [0].
What's funny about this is it's a fine metaphor for what ails crypto as a whole. The technology is cryptographically secure, but not at all robust to much simpler betrayals, hacks, etc. If you trust overmuch in the tech and don't focus on less technically interesting but more fundamental threats, you're apt to get rekt.
Still a surprisingly amateur move. Once worked for the Federal Government where literally everything you write is potentially subject to a FOIA request. The message all new hires were told was, very clearly: "Never put anything into writing you wouldn't be happy to be see published on the front page of the Washington Post"
Anything that was even vaguely close to failing this test was handled exclusively by a private phone call or, preferably, in person conversation.
And this was for an org that was doing nothing sneaky or underhanded in the slightest. Still if something could be misunderstood in a negative way, don't put it in text.
I'm still surprised when I see coworkers say things in slack, which is clearly able to be monitors by admins, that don't pass this test. Far more surprised when people knowingly engage in criminal activity and keep any kind of unnecessary record.
The main purpose of not to put things in writing and instead to discuss face to face has always been not to create incriminating evidence rather than avoiding and "unsecured channel".
When you're using Signal or WhatsApp or whatever you're still putting things in writing to someone else and the risk, as we see again and again, is that this is leaked by the receipient(s). Plus ça change...
This is almost the raison-d'être of posh private members clubs.
I think "defector" is the wrong terminology here, since it's likely that most - if not all - the US based execs who weren't charged handed over these chats to the SEC.
It is noteworthy how often this happens. Many of the people found guilty of sedition after the DC riot had the same thing happen when the majority (or a large minority) of people in their encrypted chat groups handed over them over to the FBI.
Is there an E2E encrypted chat app that does disappearing messages and doesn't cache them on the client?
>The technology is cryptographically secure, but not at all robust to much simpler betrayals, hacks, etc. If you trust overmuch in the tech and don't focus on less technically interesting but more fundamental threats, you're apt to get rekt.
Isn't this the case with anything to do with cryptography, encryption, and digital security overall?
Because let's face it: Who seriously cares if your password is cryptographically hashed with 40960-bit SHA-9001 encryption transmitted over TLS8.11 For Workgroups?
Just call up the call center and convince the scriptmonkey you really are John Dickus the Fifth and get them to reset the password for you. Easy. Done. No quantum computer required to crack the code.
> "a fine metaphor for what ails crypto as a whole. The technology is cryptographically secure, but not at all robust to much simpler betrayals, hacks, etc."
I think you mean "crypto exchanges". Cryptocurrency itself is not subject to betrayals/hacks, for the most part (depending on how dumb you are at key management). And depending on how badly you selected your cryptocurrency (pro tip: just pick Bitcoin).
> What's funny about this is it's a fine metaphor for what ails crypto as a whole. The technology is cryptographically secure, but not at all robust to much simpler betrayals, hacks, etc. If you trust overmuch in the tech and don't focus on less technically interesting but more fundamental threats, you're apt to get rekt.
That applies to all things within technology, OPSEC/INFOSEC is the very study of how to mitigate those very leaky channels, which are impossible tasks to accomplish entirely because of Human nature. I recall a post here some time ago that says that most non-leak related hacks are mainly due to social engineering, as that is the most viable way to take down an asset/target.
Honestly, CZ will likely brush this off; the US is being incredibly hostile to all things that threaten the USD; it make sense, and those that thought the USD and BTC could co-exist in the US were disillusion because of things like this.
Even that scrub Armstrong is starting to see why his pursuits to cozy up to the VC crowds and US regulators only prolonged the inevitable wherein this will return to a regulatory nightmare that favours other nations; mainland China under the CCP will continue to ban it (for nth time) in order to stifle the immense amount of capital flight out of China but it will remain legal in Hong Kong with favourable and relaxed regulations. Once again favouring the afflurent and political;ly connected who can incorporate in an absurdly HCL safe-haven like HK
and excluding the poors from utilizing financial services that could help them from the exposure to the collapsing banking sector.
And thus proving again that unless its a situation like El Salvador where it becomes a national currency there is nothing to indicate that politicians have the will or ability to actually put clear regulation in place for Capital and innovation to progress in Fintech.
Which would be obvious if you have any semblance of why Cypherpunks and renowned economist like Hayek considered a free-floating, non-state issued currency the most critical thing for a free Society.
National Fiat currencies have a limited life-span, typically 35-40 years, and this always leads to economic turmoil and inevitably war; which always favours nations who can impose their neo-bondage via entities like the IMF and World Bank when the dust settles and then gain access to cheap resources, and Human capital.
Anyhow, I'm not surprised this happened, but it's a nothing-burger that will be good for those DCA there way back into this market (myself included).
Oh that's easy- this was the compliance officer, and by showing that he raised concerns over this he may be able to claim that he did his job as best he could under the circumstances. I'd need to see the rest of the context, but this could very well be a "cover your ass" message.
Imagine if you're a security officer at a company and were just overridden on a decisions- you'd definitely want to shoot off an email describing the issue so that later on you aren't held responsible for it (of course depending on the severity quitting may also be desirable, but not everyone is in a position to immediately drop a job).
No, the criminals are extremely smart. Its just that these were amateurs who didnt know that in Anglosaxon common law, you have to avoid being honest about anything and even deny any wrongdoing even if you get caught the act of murdering someone. Then you can exercise plausible deniability, claim incompetence or mental incapacity and you can negotiate your sentence. Any kind of honesty works against you in the US law as a result. That's how you end up with people who are total experts in their field testifying in courts that they "didnt know" that something they did would cause so much harm to something or somebody or the society.
As of this very moment, thousands of much, much bigger corporations are actually destroying the entire US society in a real way and not like these amateurs who were just shuffling some funny money. But the real psychos know how common law works. There wont be any trail of their wrongdoing, and when there is, there will always be plausible deniability in that trail...
what's stupid is that quotes like this, not actual substance of what their business practices are, are the only way the SEC can establish what is and isn't a "security." there is no real truth or objective test and the SEC has offered no meaningful guidance. so they just determine this based on subjective emails the CEO sent once.
The definition of "security" is pretty objective (Howey test), but the answer it produces tends not to be liked by people in the crypto space, so they argue hard about why it's not a definition of security.
What quotes like these do is make it trivial to prove the mens rea (intent) requirements, and put a lie to claims that they didn't know it was a security or that their interpretation as not-a-security was reasonable.
The quote represents the most knowledgeable person in the defendant organization about the regulations, tacitly agreeing with the position on crypto stated by the head of the SEC. "Specifically, [the SEC head] claimed that 'everything but bitcoin' could be considered a security in the world of cryptocurrency, while bitcoin could be considered a commodity due to its stature and resolutely-decentralized nature." [1] The defendant entity could establish a bona fide defense, shut operations, or face the consequences. While bare crypto may or may not require "quotes like this" to allocated, crypto pioneers made it relatively trivial to determine they are acting outside the law, by issuing interest bearing crypto accounts and tying payments to the prospects of entities.[2]
I love that, at most it establishes that they think that they engage in securities dealings but what if they're actually mistaken in that regard or merely speak that way as a shorthand for recognizing that others, namely the SEC itself, thinks of them as securities dealers or whatever. Leaning on their self identification alone does sound weak when we surface these points out in the open. We have no objective test like you say then why are they even talking about this stuff. Do the hard work to define and wrestle with the necessary concepts. Sounds like this is all cutting edge stuff though.
I would love to know what context could surround the sentence "we are operating as a fking unlicensed securities exchange in the USA" that makes it not an admission that they are operating as an unlicensed securities exchange in the USA.
when this kind of wording is used usually in english? For me typing "we" is much easier.
reason I am asking is, if text was written "e are operating as fk....." then it's very easy to claim: "oh I wanted to write "they are", when talking about FTX" and blame them for everything (IANAL)
Setting aside whether the original letter was actually capitalized, the rule is common in English writing: https://style.mla.org/capitalizing-start-of-quotation/ ("If the first letter of the first word you quote is capitalized in your source, use a lowercase letter enclosed in square brackets").
More specifically, The Bluebook: A Uniform System of Citation provides one of many sources of angst for first-year law school students in the United States. Its secondary purpose is to prescribe much of the structure and formatting of U.S. legal writing, down to whether there's a space between the period and the capital S in something like "314 F. Supp. 1217 (N.D. Tex. 1970)" (there is), and whether there is one between the period and the 3 in "945 F.3d 265 (5th Cir. 2019)" (there isn't).
The most important Bluebook rule when altering quotations is not to change the meaning of the original text. The second most important rule is to explain the purpose of each alteration through a long set of rules (whether emphasis was in the original, whether a typo existed in the original, etc.). That covers your concern.
In legal context it almost always means "We" quoted as "we" or vice versa to match the capitalization required for the context it's quoted in. if it was "e are operating" then they probably would have notated it differently.
I don't know why he quoted it like that because in the actual filing it's literally quoted as "we are operating as a fking unlicensed securities exchange in the USA bro.".
Not capitalized or missing the "w". Page 29 if you're curious. Ctrl + F also works.
I'm not sure why the tweet adds the brackets around the w, since I don't see it in the SEC complaint. Here's what's in the linked complaint. For clarity, the "emphasis added" part is from the SEC bolding the text inside the quote, not something I added.
111. As Binance’s CCO bluntly admitted to another Binance compliance officer in
December 2018, “we are operating as a fking unlicensed securities exchange in the USA bro.”
(Emphasis added.)
"The S.E.C. said the world’s largest cryptocurrency exchange mixed “billions of dollars” in customer funds and secretly sent them to a separate company controlled by Binance’s founder, Changpeng Zhao."
That's a criminal offense.
Here's the court filing.[1] This is just a civil case for now, but expect
criminal charges. "Between October 2022 and January 2023, Zhao personally received $62.5 million from one of the Binance bank accounts."
The court filing shows the structure of Zhao's companies. The SEC has figured out how Binance works.
One thing I noticed, which always felt possibly-illegal, was how Binance and other exchanges would frequently freeze up funds that didn't meet minimum withdraws. If a coin fell to too-low of a price, they'd essentially just keep them. Sure, it is only $5-100 here and there, but that all adds up. Where does it go?
With a real bank or exchange, I'd expect some ability to sweep up my accounts and get a paper check for 50 cents if needed.
If I remember correctly you could always exchange those low amounts for their shitcoin, then exchange that for something with reasonable withdrawl fees like monero and withdraw that. (or even withdraw their shitcoin and exchange it elsewhere if it was below their minimum exchange amount)
Does anyone have withdrawal minimum that are close to $100? Most of the Kraken minimums are below $1.
It's also not true that can always empty a bank account for free. HSBC wouldn't let me sweep funds out of an account with ~$4.00 in it, for example, since it was international and the transfer fee was larger than that.
Any centralized crypto exchange will ultimately end up being a scam because there is no reason for centralized exchanges to exist at all. There is no reason for anyone to hold your funds for more than what it necessary to complete a transaction. Because of this, there is really no money to be made.
It's amazing I don't see Bisq discussed more on HN of all places. It's probably the best example of how cryptocurrency should be traded. Custodial services have always been bad news. Decentralized, capable of anonymity, and with transparent prices. The last bit makes the huge spread of cryptocurrency more obvious, which would go a long way towards helping the casual user understand the volatility.
Sure, that's what everyone said about Zhao when it was SBF's turn to be the bad guy.
With re. to Bitso specifically, a couple years ago I reached to them to let them know about a somehow serious vulnerability in their API and their response was pretty much "yeah, whatever". Really.
I remember the last post from Fred Wilson: "The Freedom To Innovate" [1]. Even if the SEC is right about Binance and others, and there are without doubt blatant and huge frauds in Web3, there are huge problems with the financial modernization within the US (and the world). Domestic wire transfers in US takes longer and are more expensive than in Europe and developing countries such as Brazil and Argentina. The SEC is not showing a neutral point of view and any special concerns with innovation and legacy system frauds.
It doesn't matter if it is call Web3, blockchain, or whatever buzzword you like, banks have real power and a clash is inevitable now or in the near future. It took a century to dethrone Bell System [2]. It is a political and economical issue, not just an industry.
> Domestic wire transfers in US takes longer and are more expensive than in Europe and developing countries such as Brazil and Argentina
Fedwires take minutes and cost nickels [1]. If you use wires frequently, get an account that doesn't charge anything for them. (The Fed is launching FedNow [2]. It will cost 4.5¢ per transfer [3].)
I am aware of this option but it happen than not every financial service use them. Also, it is wondering than other countries where faster. Immediate payment account in Argentina exists since the late 90s and we are not talking precisely about a country with a good economy and financial system. Also take a look at the Brazilian Pix payment system [1] that provides a neutral code for payment where other services built on top.
Just because the current system sucks doesn't mean a replacement will be better. Its the responsibility of people advocating for a replacement system to explain and demonstrate why it will be better.
Banks suck. But that doesn't mean crypto companies should have free reign to do whatever they want for the sake of "innovation."
The point of my comment is about a political issue in financial systems. I don't specially care if the replacement is crypto or whatever other decentralized or centralized technologies move things forward.
Banks in Singapore provide 5 minute inter-bank settlement. Banks in NZ provide multiple intra-day settlements seven days a week. Australia's NPP settles within one minute as a typical target.
Banks are perfectly capable of this. US banks may not be.
> that doesn't mean crypto companies should have free reign to do whatever they want for the sake of "innovation."
As a company, you're allowed to do anything that is not illegal. Law is not a whitelist of what you're allowed to do, it's a blacklist of what you're not allowed to do. And while it makes sense to create laws that protect consumers, it doesn't make sense to create laws that blanket ban experimentation with a new system until someone "explains and demonstrates why it will be better" to the satisfaction of some authority figure.
> Its the responsibility of people advocating for a replacement system to explain and demonstrate why it will be better.
No, it's society's responsibility to not create and to repeal laws that drive innovation offshore. Because ultimately it's a country's citizens, not the innovators, who lose out if a valuable piece of technology moves offshore. If Steve Jobs had to "explain and demonstrate" why the iPhone would be better than flip phones and blackberries to the satisfaction of Congress before being allowed to experiment with its design, Apple probably would have just moved their HQ to China, and Americans would be the ones missing out.
So just because Binance is committing fraud and breaking the law doesn't mean that in general we should be blocking the ability of companies from experimenting with new technology, whether or not you personally believe a particular technology will amount to anything.
I'm not sure that innovation in finance has always been a good thing. Over the last 50 years we've seen increased levels of debt, increased college costs, increased housing prices, a bigger and more powerful rentier class, growing income inequality, leveraged buyouts, big business eliminating small businesses, hedge funds buying housing and hospitals, big tech buying up the competition, profit is the name of the game, all of these rich people buying politicians, etc. Who came out ahead after all this?
Much of the applied innovation in crypto hasn't been good, either. Block chain is an amazing technology, but the innovators in this space didn't stop at a decentralized money transfer system, they wanted to get rich and they scammed people.
So what kind of innovation are we talking about? Who would be helped?
> Domestic wire transfers in US takes longer and are more expensive than in Europe and developing countries such as Brazil and Argentina
A small aside on this topic: I assume/hope that the new FedNow payment system coming online in a month or so will help with transfers like this.
We don't know if innovation, in general, is a bad or good thing. We assume it is generally a really great thing. Innovation requires time, fifty years is nothing to conclude that the financial system should exist in the same way as existed before.
> banks have real power and a clash is inevitable now or in the near future
Bitcoin was derailed from being peer to peer electronic cash to this strange "store of value" that doesn't store value. It heppened almost six years ago, back in 2017.
Domestic wire transfers in US takes longer and are more expensive than in Europe and developing countries such as Brazil and Argentina
Do you think the US is incapable of sending an immediate message transferring money? Of course the US has that technical capability.
AML, BSA, KYC, Anti-Fraud. These are a few of the things that slow down the transfers and add to the cost. A lot of people think they're a feature, not a bug.
Then along come money transfer services that don't have these features. They'll all either get these features or they will be shutdown. There isn't a third option.
Plenty of countries around the world have all of that _and_ instant payments.
But that takes cooperation, which is incompatible with The American Way of “Winner takes all and the more people you can downtread on the way to the top, the better”
> AML, BSA, KYC, Anti-Fraud. These are a few of the things that slow down the transfers and add to the cost. A lot of people think they're a feature, not a bug.
This is why you have to harden system at the fringes, not in the middle as old clearing systems did.
AML and KYC got more intense in my EU country at the same time as instant payments became a thing. Between regular banks. I don't think those are the problem.
> banks have real power and a clash is inevitable now or in the near future
Bitcoin was derailed from being peer to peer electronic cash to this strange "store of value" that doesn't store value. It happened almost six years ago, back in 2017.
Are we days or hours away from finding out Binance is insolvent?
Anyway, it was obvious to everyone that Binance was a scam from the beginning. Anyone with a brain knows to use a quality exchange like <INSERT NEXT FAILED CRYPTO EXCHANGE HERE>.
Fawning magazine profiles are a strong contrarian indicator. Time Man of the Year is basically like making a guy king for a day before putting him inside the wicker man and lighting it on fire.
Readit News
"Upon assuming his CEO duties, however, BAM CEO B quickly learned that Binance, in fact, exerted and would not relinquish substantial control over BAM Trading and the operation of the Binance.US Platform. As he testified under oath, BAM CEO B did not “have any firsthand knowledge of exactly what [Binance] entity managed [Binance.US Platform’s] servers,” but he knew it “wasn’t [BAM Trading].” Similarly, he also testified that the matching engine was “presumably owned and administered by some [Binance] entity, but I have no idea which one, and then there’s other servers doing other functions.” He concluded, the “biggest risk in this company is we are highly dependent on a bunch of technology that sits in Asia.”
"BAM CEO B tried to implement plans to migrate those functions and control of the crypto assets from Binance to BAM Trading and into the United States, but Zhao quickly overruled him, causing BAM CEO B to resign approximately three months into his tenure."
"As BAM CEO B testified, “[W]hat became clear to me at a certain point was CZ was the CEO of BAM Trading, not me.” He further explained that he spent his first 80 days as CEO trying “to get these core foundational things realigned,” but “was overruled on all of them” by Zhao. BAM CEO B elaborated, “All of the things that we had previously agreed and had worked on for 80 days were suddenly repudiated with no further discussion, and on that day, I realized, huh, I’m not actually the one running this company, and the mission that I believe I signed up for isn’t the mission. And as soon as I realized that, I left.”"
https://en.m.wikipedia.org/wiki/Brian_P._Brooks#Binance.US
Their job was to PLEASE: Provide legal exculpation and sign everything. (hey HIMYM fans!)
It's ironic that they are now the ones feeding SEC with inside information. It seems like the plan backfired?
Source: https://twitter.com/JohnReedStark/status/1665748594421297152
This is a legendary quote from the filing.
I think someone on the inside took screenshots and went to the feds (or started cooperating under legal pressure). There's even a leading candidate [0].
What's funny about this is it's a fine metaphor for what ails crypto as a whole. The technology is cryptographically secure, but not at all robust to much simpler betrayals, hacks, etc. If you trust overmuch in the tech and don't focus on less technically interesting but more fundamental threats, you're apt to get rekt.
[0]https://decrypt.co/124999/ex-binance-us-ceo-catherine-coley-...
Still a surprisingly amateur move. Once worked for the Federal Government where literally everything you write is potentially subject to a FOIA request. The message all new hires were told was, very clearly: "Never put anything into writing you wouldn't be happy to be see published on the front page of the Washington Post"
Anything that was even vaguely close to failing this test was handled exclusively by a private phone call or, preferably, in person conversation.
And this was for an org that was doing nothing sneaky or underhanded in the slightest. Still if something could be misunderstood in a negative way, don't put it in text.
I'm still surprised when I see coworkers say things in slack, which is clearly able to be monitors by admins, that don't pass this test. Far more surprised when people knowingly engage in criminal activity and keep any kind of unnecessary record.
When you're using Signal or WhatsApp or whatever you're still putting things in writing to someone else and the risk, as we see again and again, is that this is leaked by the receipient(s). Plus ça change...
This is almost the raison-d'être of posh private members clubs.
It is noteworthy how often this happens. Many of the people found guilty of sedition after the DC riot had the same thing happen when the majority (or a large minority) of people in their encrypted chat groups handed over them over to the FBI.
Is there an E2E encrypted chat app that does disappearing messages and doesn't cache them on the client?
On edit: another example of the crypto world re-learning the rules of finance.
Isn't this the case with anything to do with cryptography, encryption, and digital security overall?
Because let's face it: Who seriously cares if your password is cryptographically hashed with 40960-bit SHA-9001 encryption transmitted over TLS8.11 For Workgroups?
Just call up the call center and convince the scriptmonkey you really are John Dickus the Fifth and get them to reset the password for you. Easy. Done. No quantum computer required to crack the code.
I think you mean "crypto exchanges". Cryptocurrency itself is not subject to betrayals/hacks, for the most part (depending on how dumb you are at key management). And depending on how badly you selected your cryptocurrency (pro tip: just pick Bitcoin).
I wonder if they snagged a backup of an insider's phone.
That applies to all things within technology, OPSEC/INFOSEC is the very study of how to mitigate those very leaky channels, which are impossible tasks to accomplish entirely because of Human nature. I recall a post here some time ago that says that most non-leak related hacks are mainly due to social engineering, as that is the most viable way to take down an asset/target.
Honestly, CZ will likely brush this off; the US is being incredibly hostile to all things that threaten the USD; it make sense, and those that thought the USD and BTC could co-exist in the US were disillusion because of things like this.
Even that scrub Armstrong is starting to see why his pursuits to cozy up to the VC crowds and US regulators only prolonged the inevitable wherein this will return to a regulatory nightmare that favours other nations; mainland China under the CCP will continue to ban it (for nth time) in order to stifle the immense amount of capital flight out of China but it will remain legal in Hong Kong with favourable and relaxed regulations. Once again favouring the afflurent and political;ly connected who can incorporate in an absurdly HCL safe-haven like HK and excluding the poors from utilizing financial services that could help them from the exposure to the collapsing banking sector.
And thus proving again that unless its a situation like El Salvador where it becomes a national currency there is nothing to indicate that politicians have the will or ability to actually put clear regulation in place for Capital and innovation to progress in Fintech.
Which would be obvious if you have any semblance of why Cypherpunks and renowned economist like Hayek considered a free-floating, non-state issued currency the most critical thing for a free Society.
National Fiat currencies have a limited life-span, typically 35-40 years, and this always leads to economic turmoil and inevitably war; which always favours nations who can impose their neo-bondage via entities like the IMF and World Bank when the dust settles and then gain access to cheap resources, and Human capital.
Anyhow, I'm not surprised this happened, but it's a nothing-burger that will be good for those DCA there way back into this market (myself included).
[0]: https://cointelegraph.com/news/china-gains-from-strict-us-cr...
https://www.youtube.com/watch?v=Ly82nabRRYc&t=80
Robert Rules would be proud
SEC just tweeted the quote
By why would you ever send that out over a medium that'll leave a paper trail?
Thank goodness that criminals aren't very smart. Their idiocy is doing society a huge favor.
Imagine if you're a security officer at a company and were just overridden on a decisions- you'd definitely want to shoot off an email describing the issue so that later on you aren't held responsible for it (of course depending on the severity quitting may also be desirable, but not everyone is in a position to immediately drop a job).
It's even been noticed by contemporary philosophers:
https://youtube.com/shorts/Blw2dNZwZzg?feature=share
No, the criminals are extremely smart. Its just that these were amateurs who didnt know that in Anglosaxon common law, you have to avoid being honest about anything and even deny any wrongdoing even if you get caught the act of murdering someone. Then you can exercise plausible deniability, claim incompetence or mental incapacity and you can negotiate your sentence. Any kind of honesty works against you in the US law as a result. That's how you end up with people who are total experts in their field testifying in courts that they "didnt know" that something they did would cause so much harm to something or somebody or the society.
As of this very moment, thousands of much, much bigger corporations are actually destroying the entire US society in a real way and not like these amateurs who were just shuffling some funny money. But the real psychos know how common law works. There wont be any trail of their wrongdoing, and when there is, there will always be plausible deniability in that trail...
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What quotes like these do is make it trivial to prove the mens rea (intent) requirements, and put a lie to claims that they didn't know it was a security or that their interpretation as not-a-security was reasonable.
The securities allegations revolve around BNB's ICO. Binance is being sued by the CFTC in respect of its Bitcoin and Ethereum trading.
[1] https://www.nasdaq.com/articles/secs-gensler-warns-crypto-in...
[2] https://www.sec.gov/oiea/investor-alerts-and-bulletins/inves...
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anyone arguing otherwise almost certainly has a dog in the hunt
https://www.youtube.com/watch?v=14WE3A0PwVs
when this kind of wording is used usually in english? For me typing "we" is much easier.
reason I am asking is, if text was written "e are operating as fk....." then it's very easy to claim: "oh I wanted to write "they are", when talking about FTX" and blame them for everything (IANAL)
More specifically, The Bluebook: A Uniform System of Citation provides one of many sources of angst for first-year law school students in the United States. Its secondary purpose is to prescribe much of the structure and formatting of U.S. legal writing, down to whether there's a space between the period and the capital S in something like "314 F. Supp. 1217 (N.D. Tex. 1970)" (there is), and whether there is one between the period and the 3 in "945 F.3d 265 (5th Cir. 2019)" (there isn't).
The most important Bluebook rule when altering quotations is not to change the meaning of the original text. The second most important rule is to explain the purpose of each alteration through a long set of rules (whether emphasis was in the original, whether a typo existed in the original, etc.). That covers your concern.
Not capitalized or missing the "w". Page 29 if you're curious. Ctrl + F also works.
111. As Binance’s CCO bluntly admitted to another Binance compliance officer in December 2018, “we are operating as a fking unlicensed securities exchange in the USA bro.” (Emphasis added.)
That's a criminal offense.
Here's the court filing.[1] This is just a civil case for now, but expect criminal charges. "Between October 2022 and January 2023, Zhao personally received $62.5 million from one of the Binance bank accounts."
The court filing shows the structure of Zhao's companies. The SEC has figured out how Binance works.
[1] https://www.sec.gov/files/litigation/complaints/2023/comp-pr...
With a real bank or exchange, I'd expect some ability to sweep up my accounts and get a paper check for 50 cents if needed.
Does anyone have withdrawal minimum that are close to $100? Most of the Kraken minimums are below $1.
It's also not true that can always empty a bank account for free. HSBC wouldn't let me sweep funds out of an account with ~$4.00 in it, for example, since it was international and the transfer fee was larger than that.
Btw, is there a single bitcoin exchange who is operated by people that do not behave like teenagers?
Any centralized crypto exchange will ultimately end up being a scam because there is no reason for centralized exchanges to exist at all. There is no reason for anyone to hold your funds for more than what it necessary to complete a transaction. Because of this, there is really no money to be made.
With re. to Bitso specifically, a couple years ago I reached to them to let them know about a somehow serious vulnerability in their API and their response was pretty much "yeah, whatever". Really.
It doesn't matter if it is call Web3, blockchain, or whatever buzzword you like, banks have real power and a clash is inevitable now or in the near future. It took a century to dethrone Bell System [2]. It is a political and economical issue, not just an industry.
[1] https://news.ycombinator.com/item?id=36199584
[2] https://en.wikipedia.org/wiki/Bell_System
Fedwires take minutes and cost nickels [1]. If you use wires frequently, get an account that doesn't charge anything for them. (The Fed is launching FedNow [2]. It will cost 4.5¢ per transfer [3].)
[1] https://www.frbservices.org/resources/fees/wires-2023
[2] https://www.federalreserve.gov/newsevents/pressreleases/othe...
[3] https://www.frbservices.org/resources/fees/fednow-2023
[1] https://en.wikipedia.org/wiki/Pix_(payment_system)
Banks suck. But that doesn't mean crypto companies should have free reign to do whatever they want for the sake of "innovation."
Banks in Singapore provide 5 minute inter-bank settlement. Banks in NZ provide multiple intra-day settlements seven days a week. Australia's NPP settles within one minute as a typical target.
Banks are perfectly capable of this. US banks may not be.
As a company, you're allowed to do anything that is not illegal. Law is not a whitelist of what you're allowed to do, it's a blacklist of what you're not allowed to do. And while it makes sense to create laws that protect consumers, it doesn't make sense to create laws that blanket ban experimentation with a new system until someone "explains and demonstrates why it will be better" to the satisfaction of some authority figure.
> Its the responsibility of people advocating for a replacement system to explain and demonstrate why it will be better.
No, it's society's responsibility to not create and to repeal laws that drive innovation offshore. Because ultimately it's a country's citizens, not the innovators, who lose out if a valuable piece of technology moves offshore. If Steve Jobs had to "explain and demonstrate" why the iPhone would be better than flip phones and blackberries to the satisfaction of Congress before being allowed to experiment with its design, Apple probably would have just moved their HQ to China, and Americans would be the ones missing out.
So just because Binance is committing fraud and breaking the law doesn't mean that in general we should be blocking the ability of companies from experimenting with new technology, whether or not you personally believe a particular technology will amount to anything.
I'm not sure that innovation in finance has always been a good thing. Over the last 50 years we've seen increased levels of debt, increased college costs, increased housing prices, a bigger and more powerful rentier class, growing income inequality, leveraged buyouts, big business eliminating small businesses, hedge funds buying housing and hospitals, big tech buying up the competition, profit is the name of the game, all of these rich people buying politicians, etc. Who came out ahead after all this?
Much of the applied innovation in crypto hasn't been good, either. Block chain is an amazing technology, but the innovators in this space didn't stop at a decentralized money transfer system, they wanted to get rich and they scammed people.
So what kind of innovation are we talking about? Who would be helped?
> Domestic wire transfers in US takes longer and are more expensive than in Europe and developing countries such as Brazil and Argentina
A small aside on this topic: I assume/hope that the new FedNow payment system coming online in a month or so will help with transfers like this.
Bitcoin was derailed from being peer to peer electronic cash to this strange "store of value" that doesn't store value. It heppened almost six years ago, back in 2017.
Do you think the US is incapable of sending an immediate message transferring money? Of course the US has that technical capability.
AML, BSA, KYC, Anti-Fraud. These are a few of the things that slow down the transfers and add to the cost. A lot of people think they're a feature, not a bug.
Then along come money transfer services that don't have these features. They'll all either get these features or they will be shutdown. There isn't a third option.
But that takes cooperation, which is incompatible with The American Way of “Winner takes all and the more people you can downtread on the way to the top, the better”
This is why you have to harden system at the fringes, not in the middle as old clearing systems did.
Bitcoin was derailed from being peer to peer electronic cash to this strange "store of value" that doesn't store value. It happened almost six years ago, back in 2017.
Anyway, it was obvious to everyone that Binance was a scam from the beginning. Anyone with a brain knows to use a quality exchange like <INSERT NEXT FAILED CRYPTO EXCHANGE HERE>.