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KYC and "regulations" didn't do shit to prevent a fraud from laundering customer funds between business entities to gamble and try to save his failed hedge fund

KYC and "regulations" didn't do shit to prevent a fraud from laundering customer funds between business entities to gamble and try to save his failed hedge fund. That crime was pretty much crypto only in the sense it involved an exchange and they overleveraged themselves, but the actual crime was just straight fraud.

p0pcult 4y ago
What financial regulations were FTX under the jurisdiction of, in the Bahamas? Did FTX require KYC (I honestly don't know)?
- cypress66 4y ago
  The fact that you don't even know if FTX had KYC shows how unfounded your former comment was. Yes, it had KYC. And FTX.us was under US jurisdiction.
  - p0pcult 4y ago
    You're reading into things I didn't say. I don't claim that KYC will protect people--I claim that the regulations that do protect people go hand in hand with KYC. Crypto as the libertarian dream of government-free "money" will never go beyond libertarians. Crypto as a broader-scale augment to existing financial systems? Who know? But that won't happen without KYC and regulation. Know who seems so far unaffected by this? Coinbase. The one exchange who has been operating entirely within US jurisdiction and laws; trying to be as bank-like as possible, following all the rules.
    - throwaway87274 4y ago
      Binance has been doing better than Coinbase by a large margin, fwiw. Their US presence is probably not as strong as Coinbase, but by and large they are the #1 worldwide exchange. US regulations are not necessary and really are just a pain in the ass because everything the US government touches becomes inefficient beyond belief, it simply relies on the owners of the exchange not being incompetent & fraudulent.
- throwaway87274 4y ago
  Yeah, they were technically a Bahamas entity and fall under the jurisdiction of that country, technically, but likely under US jurisdiction as well in order to operate in the country. There's a whole really confusing business entity diagram I saw floating around somewhere, but can't find it offhand. But the way they were structured was obviously for tax havens and to blur their financial ties between entities. I'll be honest in that it goes above my head as I'm not deep into finance and regulations, however seeing statements about the level of fraud being unprecedented by the overseer of the Enron bankruptcy (who's overseeing FTX bankruptcy as well) is not very reassuring. And yes, they did require full human-verified KYC to access any exchange functionality. Actually that was a downside, because the day they filed Chapter 11, their site was compromised and who knows who potentially accessed the PII from all their customers in that mess.
  - throwaway87274 4y ago
    But yeah, SBF was very much a proponent of increased regulations and worked closely with US politicians and the SEC. They were "legit" to public view, but behind the scenes was unprecedented financial incompetence and fraud. And to clarify, they definitely had a business presence in the US with their US site and that would fall under US jurisdiction. I thought of applying there because it seemed like a cool place to work but they were only hiring for their Chicago office at the time. Glad I dodged that bullet in retrospect

p0pcult 4y ago

What financial regulations were FTX under the jurisdiction of, in the Bahamas? Did FTX require KYC (I honestly don't know)?

cypress66 4y ago
The fact that you don't even know if FTX had KYC shows how unfounded your former comment was. Yes, it had KYC. And FTX.us was under US jurisdiction.
- p0pcult 4y ago
  You're reading into things I didn't say. I don't claim that KYC will protect people--I claim that the regulations that do protect people go hand in hand with KYC. Crypto as the libertarian dream of government-free "money" will never go beyond libertarians. Crypto as a broader-scale augment to existing financial systems? Who know? But that won't happen without KYC and regulation. Know who seems so far unaffected by this? Coinbase. The one exchange who has been operating entirely within US jurisdiction and laws; trying to be as bank-like as possible, following all the rules.
  - throwaway87274 4y ago
    Binance has been doing better than Coinbase by a large margin, fwiw. Their US presence is probably not as strong as Coinbase, but by and large they are the #1 worldwide exchange. US regulations are not necessary and really are just a pain in the ass because everything the US government touches becomes inefficient beyond belief, it simply relies on the owners of the exchange not being incompetent & fraudulent.
throwaway87274 4y ago
Yeah, they were technically a Bahamas entity and fall under the jurisdiction of that country, technically, but likely under US jurisdiction as well in order to operate in the country. There's a whole really confusing business entity diagram I saw floating around somewhere, but can't find it offhand. But the way they were structured was obviously for tax havens and to blur their financial ties between entities. I'll be honest in that it goes above my head as I'm not deep into finance and regulations, however seeing statements about the level of fraud being unprecedented by the overseer of the Enron bankruptcy (who's overseeing FTX bankruptcy as well) is not very reassuring. And yes, they did require full human-verified KYC to access any exchange functionality. Actually that was a downside, because the day they filed Chapter 11, their site was compromised and who knows who potentially accessed the PII from all their customers in that mess.
- throwaway87274 4y ago
  But yeah, SBF was very much a proponent of increased regulations and worked closely with US politicians and the SEC. They were "legit" to public view, but behind the scenes was unprecedented financial incompetence and fraud. And to clarify, they definitely had a business presence in the US with their US site and that would fall under US jurisdiction. I thought of applying there because it seemed like a cool place to work but they were only hiring for their Chicago office at the time. Glad I dodged that bullet in retrospect