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Oh, gosh. The infantile methodology of purposely misreading something so it's literal and thus nonsensical (or comical). I obviously meant financial instituti

Oh, gosh. The infantile methodology of purposely misreading something so it's literal and thus nonsensical (or comical). I obviously meant financial institutions - which Bitfinex is.

i_am_proteus 8y ago
A good point, but perhaps we can agree that the mechanisms of the BTC(etc.)-USD exchanges are much less regulated than those of traditional equities/commodities/futures, etc. markets.
- mancerayder 8y ago
  For sure. I think this Tether thing will be a poster child to reverse that disparity. And having watched the Tether thing hitting the fan for the past 12 months, including when everyone knew something was up and their suspicious transactions were being posted, I'm disappointed the Law didn't crack down sooner.
mikekchar 8y ago
Out of curiosity, is that actually true? I mean Bitfinex is doing business in the US. I thought that was the link to being able to apply US laws on them. Does creating a USD backed security in another country automatically put you under US law? I'm asking because I literally don't understand how that could work.
- mancerayder 8y ago
  I'm glad you asked because I had to do a bit of research to come up with some evidence - stuff that got lost in the back of my mind when I read about it a while back. Essentially the US has jurisdiction if it's cleared with USD - and how can it be cleared with USD if there's not some US institution in one place or another. Someone with legal expertise should chime in and correct my primitive babblings. But how about: https://www.crowell.com/NewsEvents/AlertsNewsletters/all/Foreign-Banks-Subject-to-the-Jurisdiction-of-New-York-Courts-Based-on-Correspondent-Accounts https://www.crowell.com/NewsEvents/AlertsNewsletters/all/For... (NYS has jurisdiction over a foreign entity by virtue of a tie with a bank in the state.) https://cblr.columbia.edu/the-u-s-jurisdiction-over-transfers-of-u-s-dollars-between-foreigners-and-over-ownership-of-u-s-dollar-accounts-in-foreign-bans/ https://cblr.columbia.edu/the-u-s-jurisdiction-over-transfer... (An article about jurisdiction of USD transfers.) https://news.ycombinator.com/item?id=16267428 https://news.ycombinator.com/item?id=16267428 (Another recent HN discussion on this topic.)
  - jstanley 8y ago
    > how can it be cleared with USD if there's not some US institution in one place or another Anybody can setup a little hut where they take in physical US dollars and give out virtual dollars which can be transferred over the internet, ala Tether. If you operated such a hut outside the jurisdiction of the US, it doesn't matter what laws the US has, they don't apply to you. This is the point I was trying to make that you dismissed as "infantile": just because you hold US dollars doesn't mean US laws apply to you.
    - mancerayder 8y ago
      If you operated such a hut outside the jurisdiction of the US, it doesn't matter what laws the US has, they don't apply to you. I don't know what a 'hut' is in this context, but if it's connected to the USD payment system, not only can the long arm of the U.S. try to apply itself, but the said hut can be cut off via pressure on the international banking system. For the former, see the links I sent, which includes a case about New York State applying laws to an overseas entity; for the former, consider Iran and sanctions. If your hut consists of a person shuffling US currency around with thumbs and rubber bands, well, that's a different story.

Oh, gosh. The infantile methodology of purposely misreading something so it's literal and thus nonsensical (or comical). I obviously meant financial institutions - which Bitfinex is.

i_am_proteus 8y ago

A good point, but perhaps we can agree that the mechanisms of the BTC(etc.)-USD exchanges are much less regulated than those of traditional equities/commodities/futures, etc. markets.

mancerayder 8y ago
For sure. I think this Tether thing will be a poster child to reverse that disparity. And having watched the Tether thing hitting the fan for the past 12 months, including when everyone knew something was up and their suspicious transactions were being posted, I'm disappointed the Law didn't crack down sooner.

mikekchar 8y ago

Out of curiosity, is that actually true? I mean Bitfinex is doing business in the US. I thought that was the link to being able to apply US laws on them. Does creating a USD backed security in another country automatically put you under US law? I'm asking because I literally don't understand how that could work.

mancerayder 8y ago
I'm glad you asked because I had to do a bit of research to come up with some evidence - stuff that got lost in the back of my mind when I read about it a while back. Essentially the US has jurisdiction if it's cleared with USD - and how can it be cleared with USD if there's not some US institution in one place or another. Someone with legal expertise should chime in and correct my primitive babblings. But how about: https://www.crowell.com/NewsEvents/AlertsNewsletters/all/Foreign-Banks-Subject-to-the-Jurisdiction-of-New-York-Courts-Based-on-Correspondent-Accounts https://www.crowell.com/NewsEvents/AlertsNewsletters/all/For... (NYS has jurisdiction over a foreign entity by virtue of a tie with a bank in the state.) https://cblr.columbia.edu/the-u-s-jurisdiction-over-transfers-of-u-s-dollars-between-foreigners-and-over-ownership-of-u-s-dollar-accounts-in-foreign-bans/ https://cblr.columbia.edu/the-u-s-jurisdiction-over-transfer... (An article about jurisdiction of USD transfers.) https://news.ycombinator.com/item?id=16267428 https://news.ycombinator.com/item?id=16267428 (Another recent HN discussion on this topic.)
- jstanley 8y ago
  > how can it be cleared with USD if there's not some US institution in one place or another Anybody can setup a little hut where they take in physical US dollars and give out virtual dollars which can be transferred over the internet, ala Tether. If you operated such a hut outside the jurisdiction of the US, it doesn't matter what laws the US has, they don't apply to you. This is the point I was trying to make that you dismissed as "infantile": just because you hold US dollars doesn't mean US laws apply to you.
  - mancerayder 8y ago
    If you operated such a hut outside the jurisdiction of the US, it doesn't matter what laws the US has, they don't apply to you. I don't know what a 'hut' is in this context, but if it's connected to the USD payment system, not only can the long arm of the U.S. try to apply itself, but the said hut can be cut off via pressure on the international banking system. For the former, see the links I sent, which includes a case about New York State applying laws to an overseas entity; for the former, consider Iran and sanctions. If your hut consists of a person shuffling US currency around with thumbs and rubber bands, well, that's a different story.