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Crypto giant Binance moved $400M from U.S. partner to firm managed by CEO Zhao

167 points by thm 4y ago

senttoschool 4y ago
This may give US authorities enough to go after Binance.
- WeylandYutani 4y ago
  They're already blocked from doing business in the US. From what I heard nobody even knows what jurisdiction Binance is based in. Crypto is all super shady but that's how their advocates want it I guess?
  - voytec 4y ago
    Don't they have a dedicated binance.us version? Its "Licenses" page[1] lists licences from multiple US states and Guam. It is registered as "BAM Trading Services Inc." [1] https://support.binance.us/hc/en-us/articles/360050532193 https://support.binance.us/hc/en-us/articles/360050532193
  - qikInNdOutReply 4y ago
    They are a singapore company jurisdictian wise, whole city is by now just a chinese front, to avoid the embargos and hostilitys of us and chinese relations. (Similar to vietnam as final assembly place for cellphones, to avoid made in china). So its a party company, out there to keep a eye on the syphoning of funds out of china by the rich. Former founder "vanished" like so many not party animals.
    - from 4y ago
      So... China which tries to stop capital flight for some reason also secretly supports technology that results in capital flight and dollarization?
      - stevehawk 4y ago
        I'm just playing devil's advocate here but - If you control the people that run the capital flight operation, then you control who can flight capital. That may be appealing to you if you're a high enough power and want to be able to move your capital but not let the peasants do it.
      - qikInNdOutReply 4y ago
        Partial escape makes all those bribes and paid money for loyalty worth anything. Otherwise, there is no justice system, so even a billionaire can vannish over night, making all the money in the world worthless. What good is it to be a party official, if you can not garantee that your children and spouse are in safety and better off at least.
    - gautamdivgi 4y ago
      Not sure about the China angle, but if he's in Singapore he may be safe. Allegedly the Singapore-US extradition does not cover money laundering [0]. Although, I'm not sure if this will count as Fraud or Money Laundering. [0]: https://2009-2017.state.gov/j/inl/rls/nrcrpt/2016/vol2/253428.htm https://2009-2017.state.gov/j/inl/rls/nrcrpt/2016/vol2/25342...
  - hanniabu 4y ago
    > Crypto is all super shady but that's how their advocates want it I guess? Binance is not crypto, it's a traditional centralized company. This goes for most other shady stuff in the space.
    - senttoschool 4y ago
      They're a centralized company as well as a crypto company. They have their own blockchain and issue their own tokens.
Krisjohn 4y ago
[flagged]
- capableweb 4y ago
  True or not, comments like that add literally zero to the conversation. What happened with following "Be kind. Don't be snarky. Converse curiously; don't cross-examine. Comments should get more thoughtful and substantive, not less, as a topic gets more divisive."?
LatteLazy 4y ago
This seems like a non-story. If the transfers came from Binance.US (BAM) and all client money is held by Prime, then it is very unlikely that the transfers were client money. >"Where are those funds coming from?" she wrote in one message. >In a response to Coley, seen by Reuters, the Binance executive, Susan Li, did not explain the transfers. Li wrote that Merit Peak was a "vendor that facilitated trading" on Binance.US and also provided loans and capital injections to the American exchange. So Li DID explain the transfers?! It's not unusual for separate entities to market make, supply liquidity etc for exchanges, especially small, new exchanges like Binance.US in 2020/2021. And they get paid accordingly like any company rendering services. This is a similar structure to how FTX and Alameda started off. But there is nothing dodgy about that structure per see. It is the same structure that Trad-Fi exchanges use. The issue is when (a) the market maker starts betting and losing money and (b) customer funds are used to bail it out. (a) is the problem and (b) is the criminal solution... To be clear: I am not saying Binance is 110% above board, solvent, etc. Just that there is zero evidence otherwise here.
- senttoschool 4y ago
  >It is the same structure that Trad-Fi exchanges use. Traditional finance is heavily regulated, audited, and insured. We don't even know where Binance's HQ is or even where the CEO is hiding.
  - LatteLazy 4y ago
    Yeah, we need decent regs for Crypto. It's not even rocket science, we're just stuck between 2 extremist camps: "ban everything" and "regs are evil" camps. I hoped FTX would lead to basic common sense stuff but it hasn't...
    - eli 4y ago
      The problem is that if you regulate crypto enough to stamp out the blatant scams, fraud and self-dealing then it loses most of its appeal over other financial products.
propogandist 4y ago
the ponzi shell game continues
voytec 4y ago
> Coley, who left Binance.US later in 2021, didn't respond to questions sent via her legal representatives. Li also didn't respond. Last time I heard of Catherine Coley, she was nowhere to be found. I assumed her body will never be found as well. Did she appeared anywhere since April 2021?
- dsugarman 4y ago
  I understand the downvotes for being the graphic nature of your post but I learned from your post that the former CEO of Binance US has been missing for almost a year. Holy cow that feels important, the article is outlining her questioning of these transfers and then she goes missing and they don't mention that?
  - tehlike 4y ago
    I sure hope it's some sort of witness protection situation
    - mikeyouse 4y ago
      She's only "missing" in the sense that she's not answering reporter questions or engaging on social media. It's relatively easy to see via related social media accounts that she's fine, not in hiding, not in witness protection, just offline.
- smcl 4y ago
  Is it just that we haven't seen her posting on social media, or is she officially missing?
  - voytec 4y ago
    I haven't really followed the story and it's crypto, so hard to find reliable sources. This site[1] reports: > Responding to enquiries from this publication, the San Francisco Police Department revealed it has no file relating to the executive, who hasn’t used her social media accounts since abruptly leaving BinanceUS in May 2021. > "We are unable to locate a police report related to the person to whom you referred," said Public Information Officer Robert Rueca. [1] https://www.asiamarkets.com/the-curious-case-of-catherine-coley/ https://www.asiamarkets.com/the-curious-case-of-catherine-co...
3np 4y ago
> Binance executive, Susan Li, did not explain the transfers. Li wrote that Merit Peak was a "vendor that facilitated trading" on Binance.US and also provided loans and capital injections to the American exchange The last part of that may be a smoking gun. The ending parts of OP hint at why.
timcavel 4y ago
[dead]
guluarte 4y ago
funds are safu .... in his pocket lol

167 points by thm 4y ago

senttoschool 4y ago

This may give US authorities enough to go after Binance.

WeylandYutani 4y ago
They're already blocked from doing business in the US. From what I heard nobody even knows what jurisdiction Binance is based in. Crypto is all super shady but that's how their advocates want it I guess?
- voytec 4y ago
  Don't they have a dedicated binance.us version? Its "Licenses" page[1] lists licences from multiple US states and Guam. It is registered as "BAM Trading Services Inc." [1] https://support.binance.us/hc/en-us/articles/360050532193 https://support.binance.us/hc/en-us/articles/360050532193
- qikInNdOutReply 4y ago
  They are a singapore company jurisdictian wise, whole city is by now just a chinese front, to avoid the embargos and hostilitys of us and chinese relations. (Similar to vietnam as final assembly place for cellphones, to avoid made in china). So its a party company, out there to keep a eye on the syphoning of funds out of china by the rich. Former founder "vanished" like so many not party animals.
  - from 4y ago
    So... China which tries to stop capital flight for some reason also secretly supports technology that results in capital flight and dollarization?
    - stevehawk 4y ago
      I'm just playing devil's advocate here but - If you control the people that run the capital flight operation, then you control who can flight capital. That may be appealing to you if you're a high enough power and want to be able to move your capital but not let the peasants do it.
    - qikInNdOutReply 4y ago
      Partial escape makes all those bribes and paid money for loyalty worth anything. Otherwise, there is no justice system, so even a billionaire can vannish over night, making all the money in the world worthless. What good is it to be a party official, if you can not garantee that your children and spouse are in safety and better off at least.
  - gautamdivgi 4y ago
    Not sure about the China angle, but if he's in Singapore he may be safe. Allegedly the Singapore-US extradition does not cover money laundering [0]. Although, I'm not sure if this will count as Fraud or Money Laundering. [0]: https://2009-2017.state.gov/j/inl/rls/nrcrpt/2016/vol2/253428.htm https://2009-2017.state.gov/j/inl/rls/nrcrpt/2016/vol2/25342...
- hanniabu 4y ago
  > Crypto is all super shady but that's how their advocates want it I guess? Binance is not crypto, it's a traditional centralized company. This goes for most other shady stuff in the space.
  - senttoschool 4y ago
    They're a centralized company as well as a crypto company. They have their own blockchain and issue their own tokens.

Krisjohn 4y ago

[flagged]

capableweb 4y ago
True or not, comments like that add literally zero to the conversation. What happened with following "Be kind. Don't be snarky. Converse curiously; don't cross-examine. Comments should get more thoughtful and substantive, not less, as a topic gets more divisive."?

LatteLazy 4y ago

This seems like a non-story. If the transfers came from Binance.US (BAM) and all client money is held by Prime, then it is very unlikely that the transfers were client money. >"Where are those funds coming from?" she wrote in one message. >In a response to Coley, seen by Reuters, the Binance executive, Susan Li, did not explain the transfers. Li wrote that Merit Peak was a "vendor that facilitated trading" on Binance.US and also provided loans and capital injections to the American exchange. So Li DID explain the transfers?! It's not unusual for separate entities to market make, supply liquidity etc for exchanges, especially small, new exchanges like Binance.US in 2020/2021. And they get paid accordingly like any company rendering services. This is a similar structure to how FTX and Alameda started off. But there is nothing dodgy about that structure per see. It is the same structure that Trad-Fi exchanges use. The issue is when (a) the market maker starts betting and losing money and (b) customer funds are used to bail it out. (a) is the problem and (b) is the criminal solution... To be clear: I am not saying Binance is 110% above board, solvent, etc. Just that there is zero evidence otherwise here.

senttoschool 4y ago
>It is the same structure that Trad-Fi exchanges use. Traditional finance is heavily regulated, audited, and insured. We don't even know where Binance's HQ is or even where the CEO is hiding.
- LatteLazy 4y ago
  Yeah, we need decent regs for Crypto. It's not even rocket science, we're just stuck between 2 extremist camps: "ban everything" and "regs are evil" camps. I hoped FTX would lead to basic common sense stuff but it hasn't...
  - eli 4y ago
    The problem is that if you regulate crypto enough to stamp out the blatant scams, fraud and self-dealing then it loses most of its appeal over other financial products.

propogandist 4y ago

the ponzi shell game continues

voytec 4y ago

> Coley, who left Binance.US later in 2021, didn't respond to questions sent via her legal representatives. Li also didn't respond. Last time I heard of Catherine Coley, she was nowhere to be found. I assumed her body will never be found as well. Did she appeared anywhere since April 2021?

dsugarman 4y ago
I understand the downvotes for being the graphic nature of your post but I learned from your post that the former CEO of Binance US has been missing for almost a year. Holy cow that feels important, the article is outlining her questioning of these transfers and then she goes missing and they don't mention that?
- tehlike 4y ago
  I sure hope it's some sort of witness protection situation
  - mikeyouse 4y ago
    She's only "missing" in the sense that she's not answering reporter questions or engaging on social media. It's relatively easy to see via related social media accounts that she's fine, not in hiding, not in witness protection, just offline.
smcl 4y ago
Is it just that we haven't seen her posting on social media, or is she officially missing?
- voytec 4y ago
  I haven't really followed the story and it's crypto, so hard to find reliable sources. This site[1] reports: > Responding to enquiries from this publication, the San Francisco Police Department revealed it has no file relating to the executive, who hasn’t used her social media accounts since abruptly leaving BinanceUS in May 2021. > "We are unable to locate a police report related to the person to whom you referred," said Public Information Officer Robert Rueca. [1] https://www.asiamarkets.com/the-curious-case-of-catherine-coley/ https://www.asiamarkets.com/the-curious-case-of-catherine-co...

3np 4y ago

> Binance executive, Susan Li, did not explain the transfers. Li wrote that Merit Peak was a "vendor that facilitated trading" on Binance.US and also provided loans and capital injections to the American exchange The last part of that may be a smoking gun. The ending parts of OP hint at why.

timcavel 4y ago

[dead]

guluarte 4y ago

funds are safu .... in his pocket lol