7 ms·

What I fear is that U.S. Government is meddling with the only exchange that works properly in Venezuela and Argentina, especifically for the P2P trade. I know

What I fear is that U.S. Government is meddling with the only exchange that works properly in Venezuela and Argentina, especifically for the P2P trade. I know this tweet is not about P2P, but let me explain. In Venezuela and Argentina, the parallel markets are the true king of the economy. You have to exchange money using P2P exchanges if you want to barely have decent personal finances, you know, to access good currency exchange rates. It's true that other P2P exchanges exist, like Airtm and Reserve. They just do not have the capacity nor good exchange rates to appropriately cover market needs. They just can't, they are not as resourceful as Binance. If the U.S. Government starts meddling with Binance and Binance has to close, reduce functionality or kill the P2P feature on the grounds of AML, it's going to send Venezuela and Argentina to the dark ages again. EDIT: Egregious typos.

jacquesm 4y ago
The government isn't 'meddling' with Binance, Binance is under the spotlight because it appears that keeping reserves is a bit of a weak point with all of these new finance companies. If anything you should be grateful that there (finally) is some oversight, but I fear it is too little and too late.
- ivanmontillam 4y ago
  I have to disagree. That oversight in theory is good. In practice it turns out to be: "The OFAC and FATF hate your people as a whole. We cannot service you anymore. Kthxbai." I will trust regulators when regulators do not exclude people where systems would be most useful. It all boils down to: if you're not credit worthy, you must be a terrorist, capomafia or at best, a tax evader. See what happened to Uphold[0], which is unfortunate. -- [0]: https://support.uphold.com/hc/en-us/articles/6782239879451-Why-is-Uphold-pulling-out-of-Venezuela- https://support.uphold.com/hc/en-us/articles/6782239879451-W...
  - ethanbond 4y ago
    There are plenty of ways to transact money if you’re not creditworthy. What’s “missing” is a non-fraudulent way to get credit if you’re not creditworthy, and that has nothing to do with US enforcement of fraud and everything to do with the fact that only fraudulent lenders will lend to non-creditworthy people.
    - ivanmontillam 4y ago
      > everything to do with the fact that only fraudulent lenders will lend to non-creditworthy people. Exactly, another thing that happens is that the ways money is exchanged for black markets[0] is also the way terrorists and tax evaders would use. So, we share the same "highway" and get classified as such. But we aren't terrorists or tax evaders, we just need to make our lives less expensive. -- [0]: https://news.ycombinator.com/item?id=33967480 https://news.ycombinator.com/item?id=33967480
      - jacquesm 4y ago
        > But we aren't terrorists or tax evaders You aren't but you can bet that plenty of people even if they were not terrorists definitely were evading taxes by using these services, or at a minimum worsening the strength of the local currency. If enough people do that then the effect can be so strong that you end up leaving yourself no alternative. Obviously, a stable currency requires all parties to believe in it, and this is the first problem that any competent government would have to address.
        ivanmontillam 4y ago
        > definitely were evading taxes by using these services, I'm not condoning tax evasion, but in South America if you are on tax evasion and you're not wealthy then you evade taxes by ideological reasons. As a South American citizen, you'd evade taxes for: 1) Choking the government, one cent at a time. 2) If you know the Treasury Dept. of the Local Govt. is going to be looted anyway by corrupt politicians, then why pay taxes? (the most common one). It's very easy to loot the government, just bribe the Purchases Manager of any Govt. institution and pave your way to the local top elite.
  - jacquesm 4y ago
    'your people' has nothing to do with oversight of Binance. But I agree that oversight could be more precise in its goals and execution, however, and this is a big issue, it requires a well functioning, non-corrupt government in all countries participating backed by a non-corrupt police force and local financial authorities. This is a problem in a large part of the world, and even in countries where these factors are present the size of the workforce available for regulatory oversight is usually only a small fraction of the size of the workforce available for the industry itself. That's why something like WireCard could happen in Germany. And even if the demise of WireCard also hit a lot of non-players that still doesn't mean that it isn't a good thing that they are gone.
    - ivanmontillam 4y ago
      > it requires a well functioning, non-corrupt government in all countries participating backed by a non-corrupt police force and local financial authorities. In the current times, that's nothing realistically accessible to Argentinian and Venezuelan people. Too much "ideal" conditions need to happen at the same time. What we need are practical solutions.
      - jacquesm 4y ago
        Practical solutions are not going to come cheap.
- unsigner 4y ago
  My Argentinian friends tend to view everything that happens in Argentina as part of either some nefarious plot by the US government, or the glorious struggle of the brave Argentinian people against the US government. They would certainly view anything that happens with Binance, or even FTX/SBF as the US government trying to screw them over.
  - ivanmontillam 4y ago
    I try not to be like that, but sometimes it appears like so. Most of the time it's truly hard to see any alternative explanation, and I invest a lot to have the most nurtured worldview possible, with all the points of view considered. And even then, it's really hard to think in plausible alternative explanations that do not feel like pulling hair out of the head. It's like duck typing: walks like a duck, quacks like a duck, has duck legs. It must be a duck.
    - pavlov 4y ago
      The US Department of Justice suspects Binance of processing over $10 billion in illicit funds during 2022 alone. Whatever goes on in Argentinian P2P markets is an insignificant blip against this background. It sounds like you have a bit of a persecution complex going on. It's unfortunate if the effects on your corner of the world are negative, but it's really not even on the Americans' map most of the time. How about creating a local solution for your local needs instead of relying on a company like Binance whose operating principles are: "We are not headquartered anywhere, our auditor says they don't know what our parent company is named, but we'll happily transmit money to Iran"? That always seemed like it might catch up with them...
      - ivanmontillam 4y ago
        Because such a company would need to be regulated. I'm not against regulation, the problem is that once you get regulation you also accept to use the legal currency exchange rate, which is expensive for most use cases. Let me provide accurate, real-world examples: - 1 USD = 171.276 ARS (according to XE's website, this is the official exchange rate). - 1 USD = 311.25 ARS (according to Binance's P2P exchange, this is the parallel/black market rate). In Argentina, most stuff is valued in USD, even if the legal tender is ARS. If you were to buy a $2500 ARS burger with Binance money, that burger costs you $8.03 USD. If you were to buy that same exact burger with a licensed properly regulated exchange, that burger costs you $14.59 USD, almost the double. This might seem like a trivial example, and a few dollars don't seem to make much of a difference. Try the same example with your weekly grocery store basket, rental apartments, payments of a car, etc. It all adds up and most people here don't earn more than $300 USD monthly (valued in black market exchange rate, of course). Plus, Argentina and Venezuela are heavily taxed. EDIT: Formatting of the example.
londons_explore 4y ago
> They just do not have the capacity nor good exchange rates They could grow very rapidly if the customer base were to show up and demand it. I bet within a week they could 10x - at least for basic functions of deposit, exchange, withdraw.
- ivanmontillam 4y ago
  And then become big enough to appear in the radar of regulators. I elaborate more on this at[0]. -- [0]: https://news.ycombinator.com/item?id=33966948 https://news.ycombinator.com/item?id=33966948
rvz 4y ago
A use case indeed for crypto, Especially if your friends and customers are from Argentina, Nigeria, Venezuela, Russia, Ukraine and Iran who's currencies have been totally de-vauled and close to worthless. One can use that to send USDC worldwide, instantly, cheaply and can exchange that to their local fiat currency. USDC doesn't require an exchange at all, only if you are exchanging it to fiat. Both pro-crypto and anti-crypto vocals are going to have to concede on their extremities and eventually settle with crypto sitting around for a very long time in a regulated setting.
- hocuspocus 4y ago
  You're mixing so many things up that I don't know where to start. But if your customers are in Venezuela, Russia or Iran and you use stablecoins to work around US or international sanctions, you're facing pretty serious legal troubles. If ending up in jail is a valid use case for you, sure.
  - rvz 4y ago
    > But if your customers are in Venezuela, Russia or Iran and you use stablecoins to work around US or international sanctions, you're facing pretty serious legal troubles. Not if one gets a license to operate in those sanctioned countries. > If ending up in jail is a valid use case for you, sure. Sigh. So NGOs with licences to operate in sanctioned countries should be put in jail for aiding people without access to money to pay for food due to blanket sanctions then? It appears that HNers here are just too privileged to not see the global money transfer use-case, especially with countries who's currency has lost 90% of their value.

jacquesm 4y ago

The government isn't 'meddling' with Binance, Binance is under the spotlight because it appears that keeping reserves is a bit of a weak point with all of these new finance companies. If anything you should be grateful that there (finally) is some oversight, but I fear it is too little and too late.

ivanmontillam 4y ago
I have to disagree. That oversight in theory is good. In practice it turns out to be: "The OFAC and FATF hate your people as a whole. We cannot service you anymore. Kthxbai." I will trust regulators when regulators do not exclude people where systems would be most useful. It all boils down to: if you're not credit worthy, you must be a terrorist, capomafia or at best, a tax evader. See what happened to Uphold[0], which is unfortunate. -- [0]: https://support.uphold.com/hc/en-us/articles/6782239879451-Why-is-Uphold-pulling-out-of-Venezuela- https://support.uphold.com/hc/en-us/articles/6782239879451-W...
- ethanbond 4y ago
  There are plenty of ways to transact money if you’re not creditworthy. What’s “missing” is a non-fraudulent way to get credit if you’re not creditworthy, and that has nothing to do with US enforcement of fraud and everything to do with the fact that only fraudulent lenders will lend to non-creditworthy people.
  - ivanmontillam 4y ago
    > everything to do with the fact that only fraudulent lenders will lend to non-creditworthy people. Exactly, another thing that happens is that the ways money is exchanged for black markets[0] is also the way terrorists and tax evaders would use. So, we share the same "highway" and get classified as such. But we aren't terrorists or tax evaders, we just need to make our lives less expensive. -- [0]: https://news.ycombinator.com/item?id=33967480 https://news.ycombinator.com/item?id=33967480
    - jacquesm 4y ago
      > But we aren't terrorists or tax evaders You aren't but you can bet that plenty of people even if they were not terrorists definitely were evading taxes by using these services, or at a minimum worsening the strength of the local currency. If enough people do that then the effect can be so strong that you end up leaving yourself no alternative. Obviously, a stable currency requires all parties to believe in it, and this is the first problem that any competent government would have to address.
      - ivanmontillam 4y ago
        > definitely were evading taxes by using these services, I'm not condoning tax evasion, but in South America if you are on tax evasion and you're not wealthy then you evade taxes by ideological reasons. As a South American citizen, you'd evade taxes for: 1) Choking the government, one cent at a time. 2) If you know the Treasury Dept. of the Local Govt. is going to be looted anyway by corrupt politicians, then why pay taxes? (the most common one). It's very easy to loot the government, just bribe the Purchases Manager of any Govt. institution and pave your way to the local top elite.
- jacquesm 4y ago
  'your people' has nothing to do with oversight of Binance. But I agree that oversight could be more precise in its goals and execution, however, and this is a big issue, it requires a well functioning, non-corrupt government in all countries participating backed by a non-corrupt police force and local financial authorities. This is a problem in a large part of the world, and even in countries where these factors are present the size of the workforce available for regulatory oversight is usually only a small fraction of the size of the workforce available for the industry itself. That's why something like WireCard could happen in Germany. And even if the demise of WireCard also hit a lot of non-players that still doesn't mean that it isn't a good thing that they are gone.
  - ivanmontillam 4y ago
    > it requires a well functioning, non-corrupt government in all countries participating backed by a non-corrupt police force and local financial authorities. In the current times, that's nothing realistically accessible to Argentinian and Venezuelan people. Too much "ideal" conditions need to happen at the same time. What we need are practical solutions.
    - jacquesm 4y ago
      Practical solutions are not going to come cheap.
unsigner 4y ago
My Argentinian friends tend to view everything that happens in Argentina as part of either some nefarious plot by the US government, or the glorious struggle of the brave Argentinian people against the US government. They would certainly view anything that happens with Binance, or even FTX/SBF as the US government trying to screw them over.
- ivanmontillam 4y ago
  I try not to be like that, but sometimes it appears like so. Most of the time it's truly hard to see any alternative explanation, and I invest a lot to have the most nurtured worldview possible, with all the points of view considered. And even then, it's really hard to think in plausible alternative explanations that do not feel like pulling hair out of the head. It's like duck typing: walks like a duck, quacks like a duck, has duck legs. It must be a duck.
  - pavlov 4y ago
    The US Department of Justice suspects Binance of processing over $10 billion in illicit funds during 2022 alone. Whatever goes on in Argentinian P2P markets is an insignificant blip against this background. It sounds like you have a bit of a persecution complex going on. It's unfortunate if the effects on your corner of the world are negative, but it's really not even on the Americans' map most of the time. How about creating a local solution for your local needs instead of relying on a company like Binance whose operating principles are: "We are not headquartered anywhere, our auditor says they don't know what our parent company is named, but we'll happily transmit money to Iran"? That always seemed like it might catch up with them...
    - ivanmontillam 4y ago
      Because such a company would need to be regulated. I'm not against regulation, the problem is that once you get regulation you also accept to use the legal currency exchange rate, which is expensive for most use cases. Let me provide accurate, real-world examples: - 1 USD = 171.276 ARS (according to XE's website, this is the official exchange rate). - 1 USD = 311.25 ARS (according to Binance's P2P exchange, this is the parallel/black market rate). In Argentina, most stuff is valued in USD, even if the legal tender is ARS. If you were to buy a $2500 ARS burger with Binance money, that burger costs you $8.03 USD. If you were to buy that same exact burger with a licensed properly regulated exchange, that burger costs you $14.59 USD, almost the double. This might seem like a trivial example, and a few dollars don't seem to make much of a difference. Try the same example with your weekly grocery store basket, rental apartments, payments of a car, etc. It all adds up and most people here don't earn more than $300 USD monthly (valued in black market exchange rate, of course). Plus, Argentina and Venezuela are heavily taxed. EDIT: Formatting of the example.

londons_explore 4y ago

> They just do not have the capacity nor good exchange rates They could grow very rapidly if the customer base were to show up and demand it. I bet within a week they could 10x - at least for basic functions of deposit, exchange, withdraw.

ivanmontillam 4y ago
And then become big enough to appear in the radar of regulators. I elaborate more on this at[0]. -- [0]: https://news.ycombinator.com/item?id=33966948 https://news.ycombinator.com/item?id=33966948

rvz 4y ago

A use case indeed for crypto, Especially if your friends and customers are from Argentina, Nigeria, Venezuela, Russia, Ukraine and Iran who's currencies have been totally de-vauled and close to worthless. One can use that to send USDC worldwide, instantly, cheaply and can exchange that to their local fiat currency. USDC doesn't require an exchange at all, only if you are exchanging it to fiat. Both pro-crypto and anti-crypto vocals are going to have to concede on their extremities and eventually settle with crypto sitting around for a very long time in a regulated setting.

hocuspocus 4y ago
You're mixing so many things up that I don't know where to start. But if your customers are in Venezuela, Russia or Iran and you use stablecoins to work around US or international sanctions, you're facing pretty serious legal troubles. If ending up in jail is a valid use case for you, sure.
- rvz 4y ago
  > But if your customers are in Venezuela, Russia or Iran and you use stablecoins to work around US or international sanctions, you're facing pretty serious legal troubles. Not if one gets a license to operate in those sanctioned countries. > If ending up in jail is a valid use case for you, sure. Sigh. So NGOs with licences to operate in sanctioned countries should be put in jail for aiding people without access to money to pay for food due to blanket sanctions then? It appears that HNers here are just too privileged to not see the global money transfer use-case, especially with countries who's currency has lost 90% of their value.