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Binance investigated by CFTC over whether US residents trade on platform

127 points by f430 6y ago

xmly 6y ago
of course there are. They advertised heavily on Twitter and etc.
1996 6y ago
Should Iran also investigate if Iranian residents trade on Binance? And if they do, why is it Binance responsability to bow to the Iranian government? And if they don't bow, why should Binance bow to the US? Conclusion: Team USA: world police.
- filoleg 6y ago
  >Should Iran also investigate if Iranian residents trade on Binance? It isn't a matter of should. But they definitely could, if Binance operates in Iran, and they suspect Binance is doing something that is against the law there. >And if they do, why is it Binance responsibility to bow to the Iranian government? If they want to conduct business with Iran, then they have to take on that responsibility. If they don't care about conducting business with Iran, they are welcome to not listen to any demands and just walk away. >And if they don't bow, why should Binance bow to the US? If they don't bow, they won't be able to conduct transactions and business with US entities completely, such as banks and payment providers. Whether they should bow or not is up to whether they want to continue that relationship. For context, Binance DOES operate within the US, they just have a separate entity set up for it called Binance US that is fully compliant with US regulations and doesn't allow trading crypto derivatives (only regular crypto coins). Binance (the non-US one that allows derivatives) is self-blocking US users. The allegation is that despite all of that, Binance allowed derivative crypto trades to slip through the cracks in the US. If Binance doesn't comply and is at fault, then they are risking getting their Binance US entity prevented from operating in the US. This has nothing to do with world policing or anything like that. If the business you are conducting in a country doesn't comply with local regulations, you are running a risk of getting investigated and asked to either fix it up (if you were given such a chance depending on circumstances) or get out, as simple as that.
  - bluesign 6y ago
    Imagine Apple is investigated by regulators because some US people created UK account and downloaded some app not available in US. This kind of behavior is bad, doesn’t matter which country does it.
    - filoleg 6y ago
      Assuming you are talking about a case where some app is illegal in US, but not in UK, as long as Apple has sufficient safeguards, they should be in the clear. For example, don't you need a valid address in another country to create an app store account there? Or maybe a credit card from that country? If yes, then that sounds like a sufficient safeguard. Not that it really matters, given I haven't heard of any Apple app store apps that are legal in UK but are explicitly illegal in the US. I remember there was a scare like that with TikTok/WhatsApp last year, but it never went through, so there isn't really a real life situation that could've set the precedent for such a thing. I don't doubt that once such a situation occurs, Apple might indeed get looked into by the regulators. Would be an interesting case to observe for sure. Either way, that hypothetical situation is much much less clear-cut than what's happening with Binance right now, though I can definitely see the similarities.
      - bluesign 6y ago
        Yeah the problem here is, US is expecting more than standard controls. Basically from the article, People from US trying more imaginative ways everyday. This shouldn’t be necessary, or maybe LE should go after that people a bit too? I never heard any enforcement to US citizens doing this, but always regulatory pressure. PS: in Apple case, as long as app is free , you can create any account from any country. But regulators would not be able to show teeth there for sure anyway
        ketamine__ 6y ago
        Or maybe Binance should put some effort (they are a tech company after all) into figuring out if a user is from the US instead of telling its users to use a VPN. I'm actually a BNB holder but the arguments here are silly.
- anonporridge 6y ago
  Inflation of the dollar, which is used as the global reserve currency, is how the US extracts tribute from it's global empire.
  - BobbyJo 6y ago
    I think a better way to look at it is: people paying to park wealth in the worlds most stable and transferable currency. Even North Korea likes holding US dollars. We have the most stable, predictable economic environment in the world, and the oldest functioning constitution. Why would we not extract some of the value in that? Another point: Inflation plays a domestic role as well, as it increases the velocity of money.
    - dnautics 6y ago
      > Inflation plays a domestic role as well, It's a fantastic way to steal from the poorest and most vulnerable citizens and blame it on "capitalism".
      - anonporridge 6y ago
        It's definitely fantastic for anyone with employees. If the currency was deflating, you better believe your boss would be doing a downward cost of living adjustment ever single paycheck. As it stands, they can just keep your pay fixed and you are constantly becoming a lesser business cost until they begrudgingly give you a 1-2% annual cost of living adjustment. Basically, it's easier to manipulate individuals into working for less if the number they're getting remains the same or even goes up, but slower than real inflation.
        dnautics 6y ago
        > Basically, it's easier to manipulate individuals into working for less if the number they're getting remains the same or even goes up, but slower than real inflation. But that's that's not what happens. Wages don't keep up with inflation. https://www.epi.org/productivity-pay-gap/ https://www.epi.org/productivity-pay-gap/
vmception 6y ago
this is the least productive use of energy there was a time when IP blocking was enough to satisfy regulators but now they're basically saying there is nothing a company can do one of the case studies in my ethics course during my Computer Science degree was about the regulators being satisfied with IP blocks and aware "determined" people could circumvent them due to the structure of the internet. that was a case 20 years ago. now they're saying that's not good enough? you don't have to be particularly determined to use a VPN but the state can just give better guidance or be more collaborative instead of adversarial
- ForHackernews 6y ago
  > this is the least productive use of energy I agree! Proof-of-work cryptocurrencies are tremendously wasteful.
  - vmception 6y ago
    This is a discussion about the CFTC's use of public resources towards a completely offchain use case
    - technocratius 6y ago
      That was the joke
  - daniellarusso 6y ago
    So is streaming video.
    - ForHackernews 6y ago
      Does youtube use 100x as much energy if 2x more people watch videos? People really need to look into how bitcoin's Red Queen's Race works.
      - daniellarusso 6y ago
Ceezy 6y ago
Same here ->> https://news.ycombinator.com/item?id=26436558 https://news.ycombinator.com/item?id=26436558
deleted 6y ago
[deleted]
trident5000 6y ago
Dont you dare trade derivatives because you're too stupid but please play the state sponsored lottery!
roenxi 6y ago
The US government basically claims jurisdiction over the entire global financial system. There are philosophical problems with this stance, but simultaneously the government seems to be trying to lock its own citizens out of that system. The strategy here, if there is one, baffles me. There seems to be a real cost to taking on US customers. This is just one small facet of a crazy problem. Do people in America seriously consider it an acceptable trade-off when "Binance blocks U.S. residents from its website"? This just looks like own goal after own goal.
- secfirstmd 6y ago
  The cost of taking onboard US customers is always a big issue. Particularly related to insurance. We build open source mobile apps to help people learn about and manage digital security. When we first setup our company in the UK we easily got insurance coverage across the EU and rest of the EMEA for about a few hundred pounds. Want to get if for the US also for a new company? Oh that'll be in the tens of thousands of pounds.
  - teekert 6y ago
    It makes for good Lawyer and Hospital series, the US legal and healthcare systems are filled with emotional (and particularly financial) drama for normal people.
  - chii 6y ago
    i'm interested in is why it's so much more expensive in the US. Is it monopoly? Why couldn't similar prices be reached in the US, if the insurance offered the same in the EU region?
    - londons_explore 6y ago
      Companies in the US have a far higher chance of losing big expensive lawsuits. In Europe lawsuits tend to be both cheaper and rarer.
      - 6y ago
CryptoPunk 6y ago
Total deregulation is the only way. People should be free to contract as they wish, without limitations imposed on them by centralized regulatory authorities. The alternative in this age of instant global communication is this: US regulatory agencies having to prosecute companies in other countries because people living in the US were able to access the companies' services through the internet, resulting in no company anywhere on Earth being allowed by arms of the US regulatory system to provide financial services that do not ID and track customers.
- chii 6y ago
  which is a good out come, if the goal is to prevent money laundering and proceeds of crime from being cleaned and used.
  - CryptoPunk 6y ago
    Instituting warrantless mass-surveillance, which makes institutional tyranny far more likely, to reduce crime from non-state-actors, is a terrible trade off. It's not even effective at reducing crime: https://www.ledgerinsights.com/anti-money-laundering-has-less-than-1-impact-on-crime-at-what-cost/ https://www.ledgerinsights.com/anti-money-laundering-has-les...
- qertoip 6y ago
  You are absolutely right but it gets even worse. The KYC bullshit is on the brink to spill over to non financial services, like messaging apps, hosting, email, and what not.
- yowlingcat 6y ago
  > Total deregulation is the only way. "He turned. In his hand was a revolver that the Constitution said he had every right to own. He fired at me and missed. I pulled my own gun, put a quarter in it, and fired back. The bullet lodged in a U.S.P.S. mailbox less than a foot from his head. I shot the mailbox again, on purpose." [1] [1] https://www.newyorker.com/humor/daily-shouts/l-p-d-libertarian-police-department https://www.newyorker.com/humor/daily-shouts/l-p-d-libertari...
johndoe42377 6y ago
Isn't KYC is mandatory on Binance? They forced it on me almost year ago.
jl2718 6y ago
What exact service is the CFTC providing to the US citizen here?
jl2718 6y ago
If anybody has any questions about why Bitcoin is worth anything at all, this is your answer.

127 points by f430 6y ago

xmly 6y ago

of course there are. They advertised heavily on Twitter and etc.

1996 6y ago

Should Iran also investigate if Iranian residents trade on Binance? And if they do, why is it Binance responsability to bow to the Iranian government? And if they don't bow, why should Binance bow to the US? Conclusion: Team USA: world police.

filoleg 6y ago
>Should Iran also investigate if Iranian residents trade on Binance? It isn't a matter of should. But they definitely could, if Binance operates in Iran, and they suspect Binance is doing something that is against the law there. >And if they do, why is it Binance responsibility to bow to the Iranian government? If they want to conduct business with Iran, then they have to take on that responsibility. If they don't care about conducting business with Iran, they are welcome to not listen to any demands and just walk away. >And if they don't bow, why should Binance bow to the US? If they don't bow, they won't be able to conduct transactions and business with US entities completely, such as banks and payment providers. Whether they should bow or not is up to whether they want to continue that relationship. For context, Binance DOES operate within the US, they just have a separate entity set up for it called Binance US that is fully compliant with US regulations and doesn't allow trading crypto derivatives (only regular crypto coins). Binance (the non-US one that allows derivatives) is self-blocking US users. The allegation is that despite all of that, Binance allowed derivative crypto trades to slip through the cracks in the US. If Binance doesn't comply and is at fault, then they are risking getting their Binance US entity prevented from operating in the US. This has nothing to do with world policing or anything like that. If the business you are conducting in a country doesn't comply with local regulations, you are running a risk of getting investigated and asked to either fix it up (if you were given such a chance depending on circumstances) or get out, as simple as that.
- bluesign 6y ago
  Imagine Apple is investigated by regulators because some US people created UK account and downloaded some app not available in US. This kind of behavior is bad, doesn’t matter which country does it.
  - filoleg 6y ago
    Assuming you are talking about a case where some app is illegal in US, but not in UK, as long as Apple has sufficient safeguards, they should be in the clear. For example, don't you need a valid address in another country to create an app store account there? Or maybe a credit card from that country? If yes, then that sounds like a sufficient safeguard. Not that it really matters, given I haven't heard of any Apple app store apps that are legal in UK but are explicitly illegal in the US. I remember there was a scare like that with TikTok/WhatsApp last year, but it never went through, so there isn't really a real life situation that could've set the precedent for such a thing. I don't doubt that once such a situation occurs, Apple might indeed get looked into by the regulators. Would be an interesting case to observe for sure. Either way, that hypothetical situation is much much less clear-cut than what's happening with Binance right now, though I can definitely see the similarities.
    - bluesign 6y ago
      Yeah the problem here is, US is expecting more than standard controls. Basically from the article, People from US trying more imaginative ways everyday. This shouldn’t be necessary, or maybe LE should go after that people a bit too? I never heard any enforcement to US citizens doing this, but always regulatory pressure. PS: in Apple case, as long as app is free , you can create any account from any country. But regulators would not be able to show teeth there for sure anyway
      - ketamine__ 6y ago
        Or maybe Binance should put some effort (they are a tech company after all) into figuring out if a user is from the US instead of telling its users to use a VPN. I'm actually a BNB holder but the arguments here are silly.
anonporridge 6y ago
Inflation of the dollar, which is used as the global reserve currency, is how the US extracts tribute from it's global empire.
- BobbyJo 6y ago
  I think a better way to look at it is: people paying to park wealth in the worlds most stable and transferable currency. Even North Korea likes holding US dollars. We have the most stable, predictable economic environment in the world, and the oldest functioning constitution. Why would we not extract some of the value in that? Another point: Inflation plays a domestic role as well, as it increases the velocity of money.
  - dnautics 6y ago
    > Inflation plays a domestic role as well, It's a fantastic way to steal from the poorest and most vulnerable citizens and blame it on "capitalism".
    - anonporridge 6y ago
      It's definitely fantastic for anyone with employees. If the currency was deflating, you better believe your boss would be doing a downward cost of living adjustment ever single paycheck. As it stands, they can just keep your pay fixed and you are constantly becoming a lesser business cost until they begrudgingly give you a 1-2% annual cost of living adjustment. Basically, it's easier to manipulate individuals into working for less if the number they're getting remains the same or even goes up, but slower than real inflation.
      - dnautics 6y ago
        > Basically, it's easier to manipulate individuals into working for less if the number they're getting remains the same or even goes up, but slower than real inflation. But that's that's not what happens. Wages don't keep up with inflation. https://www.epi.org/productivity-pay-gap/ https://www.epi.org/productivity-pay-gap/

vmception 6y ago

this is the least productive use of energy there was a time when IP blocking was enough to satisfy regulators but now they're basically saying there is nothing a company can do one of the case studies in my ethics course during my Computer Science degree was about the regulators being satisfied with IP blocks and aware "determined" people could circumvent them due to the structure of the internet. that was a case 20 years ago. now they're saying that's not good enough? you don't have to be particularly determined to use a VPN but the state can just give better guidance or be more collaborative instead of adversarial

ForHackernews 6y ago
> this is the least productive use of energy I agree! Proof-of-work cryptocurrencies are tremendously wasteful.
- vmception 6y ago
  This is a discussion about the CFTC's use of public resources towards a completely offchain use case
  - technocratius 6y ago
    That was the joke
- daniellarusso 6y ago
  So is streaming video.
  - ForHackernews 6y ago
    Does youtube use 100x as much energy if 2x more people watch videos? People really need to look into how bitcoin's Red Queen's Race works.
    - daniellarusso 6y ago

Ceezy 6y ago

Same here ->> https://news.ycombinator.com/item?id=26436558 https://news.ycombinator.com/item?id=26436558

deleted 6y ago

[deleted]

trident5000 6y ago

Dont you dare trade derivatives because you're too stupid but please play the state sponsored lottery!

roenxi 6y ago

The US government basically claims jurisdiction over the entire global financial system. There are philosophical problems with this stance, but simultaneously the government seems to be trying to lock its own citizens out of that system. The strategy here, if there is one, baffles me. There seems to be a real cost to taking on US customers. This is just one small facet of a crazy problem. Do people in America seriously consider it an acceptable trade-off when "Binance blocks U.S. residents from its website"? This just looks like own goal after own goal.

secfirstmd 6y ago
The cost of taking onboard US customers is always a big issue. Particularly related to insurance. We build open source mobile apps to help people learn about and manage digital security. When we first setup our company in the UK we easily got insurance coverage across the EU and rest of the EMEA for about a few hundred pounds. Want to get if for the US also for a new company? Oh that'll be in the tens of thousands of pounds.
- teekert 6y ago
  It makes for good Lawyer and Hospital series, the US legal and healthcare systems are filled with emotional (and particularly financial) drama for normal people.
- chii 6y ago
  i'm interested in is why it's so much more expensive in the US. Is it monopoly? Why couldn't similar prices be reached in the US, if the insurance offered the same in the EU region?
  - londons_explore 6y ago
    Companies in the US have a far higher chance of losing big expensive lawsuits. In Europe lawsuits tend to be both cheaper and rarer.
    - 6y ago

CryptoPunk 6y ago

Total deregulation is the only way. People should be free to contract as they wish, without limitations imposed on them by centralized regulatory authorities. The alternative in this age of instant global communication is this: US regulatory agencies having to prosecute companies in other countries because people living in the US were able to access the companies' services through the internet, resulting in no company anywhere on Earth being allowed by arms of the US regulatory system to provide financial services that do not ID and track customers.

chii 6y ago
which is a good out come, if the goal is to prevent money laundering and proceeds of crime from being cleaned and used.
- CryptoPunk 6y ago
  Instituting warrantless mass-surveillance, which makes institutional tyranny far more likely, to reduce crime from non-state-actors, is a terrible trade off. It's not even effective at reducing crime: https://www.ledgerinsights.com/anti-money-laundering-has-less-than-1-impact-on-crime-at-what-cost/ https://www.ledgerinsights.com/anti-money-laundering-has-les...
qertoip 6y ago
You are absolutely right but it gets even worse. The KYC bullshit is on the brink to spill over to non financial services, like messaging apps, hosting, email, and what not.
yowlingcat 6y ago
> Total deregulation is the only way. "He turned. In his hand was a revolver that the Constitution said he had every right to own. He fired at me and missed. I pulled my own gun, put a quarter in it, and fired back. The bullet lodged in a U.S.P.S. mailbox less than a foot from his head. I shot the mailbox again, on purpose." [1] [1] https://www.newyorker.com/humor/daily-shouts/l-p-d-libertarian-police-department https://www.newyorker.com/humor/daily-shouts/l-p-d-libertari...

johndoe42377 6y ago

Isn't KYC is mandatory on Binance? They forced it on me almost year ago.

jl2718 6y ago

What exact service is the CFTC providing to the US citizen here?

jl2718 6y ago

If anybody has any questions about why Bitcoin is worth anything at all, this is your answer.