6 ms·

Crypto giant Binance became a hub for hackers, fraudsters, and drug traffickers

45 points by IdEntities 4y ago

Finnucane 4y ago
yieldcrv 4y ago
I would like a more comprehensive challenge to the concept of dirty money as I think it exists on shaky grounds as well as the entire anti-money laundering framework. Basically, people are expecting crypto institutions to flag, freeze, and return funds deposited, funds whose partial provenance can be read in real time but cannot be stopped in advance. This uses an evolving set of homegrown or contracted out software to detect to find any red flags in the history of provenance. My issue with this is how do you know the state hasn't already deemed those funds to be magically cleaned after passing through the state's "due process" mixer? An easy one to follow - simply because we respect it - is when funds are seized by the US Department of Justice and then auctioned off again by the US Marshalls. Wow, two more transactions in the chain of provenance that contained red flags before the seizure, but now must be ignored forever after because of the re-auctioning? Okay, so what about when a more obscure authority does the same. The island nation of Vanautu seizes and reintegrates crypto back into the economy. Or China, whose due process we don't respect, does it, but is a sovereign who we must respect. Are these funds clean? Can a human tell, can software tell? Can any sovereign determine funds are clean, perhaps pushing this to its logical extreme of becoming a funds cleaner? Is it worth doing this kind of flagging at all?
- shkkmo 4y ago
  > Can any sovereign determine funds are clean, perhaps pushing this to its logical extreme of becoming a funds cleaner? That's up to each sovereign. Each sovereign has the ability the set the rules by which you must run your business if you want to operate in their country. If you want to operate in the US (or do business with US financial institutions) then you have to follow the US rules for which transactions must be blocked. Since stolen property still belongs to the owner, recieving stolen property put can you at risk of having that property legally confiscated and returned to the owner. When operating in jurisdictions that allow this, blocking such transactions protects your customers. Thus there are two good reasons to engage in this kind of flagging, protecting yourself from regulatory authorities and protecting your customers against asset seizure.
  - yieldcrv 4y ago
    The point is that the outcome of each sovereign is passported to nearly every other one. The point is that the US also participates in this fund whitelist passporting, and the US framework isn't particularly good at determing an illicit origin of funds either. When taken to one of its logical extremes, it doesn't make sense to bother whitelisting funds at all.
Shadonototra 4y ago
What about Coinbase (YC S12)? Same fraud, on top of insider trading! https://news.ycombinator.com/item?id=31012462 https://news.ycombinator.com/item?id=31012462 Typical "china bad, USA angel" article, shame
- jandrese 4y ago
  Who said anything about Coinbase? Just because Binance is catering to criminals doesn't mean Coinbase is on the up and up. They are all assholes.
deleted 4y ago
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45 points by IdEntities 4y ago

I would like a more comprehensive challenge to the concept of dirty money as I think it exists on shaky grounds as well as the entire anti-money laundering framework. Basically, people are expecting crypto institutions to flag, freeze, and return funds deposited, funds whose partial provenance can be read in real time but cannot be stopped in advance. This uses an evolving set of homegrown or contracted out software to detect to find any red flags in the history of provenance. My issue with this is how do you know the state hasn't already deemed those funds to be magically cleaned after passing through the state's "due process" mixer? An easy one to follow - simply because we respect it - is when funds are seized by the US Department of Justice and then auctioned off again by the US Marshalls. Wow, two more transactions in the chain of provenance that contained red flags before the seizure, but now must be ignored forever after because of the re-auctioning? Okay, so what about when a more obscure authority does the same. The island nation of Vanautu seizes and reintegrates crypto back into the economy. Or China, whose due process we don't respect, does it, but is a sovereign who we must respect. Are these funds clean? Can a human tell, can software tell? Can any sovereign determine funds are clean, perhaps pushing this to its logical extreme of becoming a funds cleaner? Is it worth doing this kind of flagging at all?

shkkmo 4y ago
> Can any sovereign determine funds are clean, perhaps pushing this to its logical extreme of becoming a funds cleaner? That's up to each sovereign. Each sovereign has the ability the set the rules by which you must run your business if you want to operate in their country. If you want to operate in the US (or do business with US financial institutions) then you have to follow the US rules for which transactions must be blocked. Since stolen property still belongs to the owner, recieving stolen property put can you at risk of having that property legally confiscated and returned to the owner. When operating in jurisdictions that allow this, blocking such transactions protects your customers. Thus there are two good reasons to engage in this kind of flagging, protecting yourself from regulatory authorities and protecting your customers against asset seizure.
- yieldcrv 4y ago
  The point is that the outcome of each sovereign is passported to nearly every other one. The point is that the US also participates in this fund whitelist passporting, and the US framework isn't particularly good at determing an illicit origin of funds either. When taken to one of its logical extremes, it doesn't make sense to bother whitelisting funds at all.

Shadonototra 4y ago

What about Coinbase (YC S12)? Same fraud, on top of insider trading! https://news.ycombinator.com/item?id=31012462 https://news.ycombinator.com/item?id=31012462 Typical "china bad, USA angel" article, shame

jandrese 4y ago
Who said anything about Coinbase? Just because Binance is catering to criminals doesn't mean Coinbase is on the up and up. They are all assholes.

deleted 4y ago

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