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People are forgetting that Binance is not a US company nor a bank
by seydor 4y ago
People are forgetting that Binance is not a US company nor a bank
- mikeyouse 4y agoContrary to their preferences, when 12% of your trading volume comes from a Chicago-based trader, you are square in the realm of "governed by applicable US laws".
- psychlops 4y agoThat's probably Binance.US.
- KptMarchewa 4y agoCFTC explicitely claims that 1) that's not true, 2) CZ and rest of upper management were aware that their restrictions on US users were just for media.
- bobthepanda 4y agoAlso, even if it were, having a subsidiary does not magically launder things the parent company does.
- charliea0 4y agoI’m pretty curious who their large client in Chicago was. Might be Jump Trading but who knows?
- dgellow 4y agoIf they offer their services in the US, they have to comply with US laws. From the article: > The CFTC has alleged that "Binance has taken a calculated, phased approach to increase its United States presence despite publicly stating its purported intent to 'block' or 'restrict' customers located in the United States from accessing its platform... All the while, Binance, Zhao, and Lim, the platform's Chief Compliance Officer ('CCO'), have each known that Binance's solicitation of customers located in the United States subjected Binance to registration and regulatory requirements under U.S. law. That seems to be what CFC is arguing here.
- owenmarshall 4y agoUS financial enforcement agencies take a very expansive view of their jurisdiction. OFAC has gone after non-US companies at non-US banks for violating sanctions because US dollars were used in the process – that's enough for them to establish a US nexus.
- seydor 4y agoAnd when GDPR does it they pick up the pitchforks
- arcticbull 4y agoAnyone who does business in the EU complies with GDPR.
- JumpCrisscross 4y agoAlso, anyone who complies with any paperwork-heavy law complains about it.
- lmm 4y agoAnyone who does business in the EU makes enough of a performative effort that they can claim to be following industry best practice, and maybe even believe it. Approximately none of them actually comply with the GDPR. (For example anyone using Google Analytics is in breach, and knows it if they're paying attention, but it'll take a few years for that to become legally official enough that they can't pretend to be ignorant)
- josefx 4y agoAs far as I understand US companies literally can't, as US law enforcement does not follow any of the procedures and protections required by the GDPR and can just compel the US companies to provide unchecked, unrestricted and undocumented access to whatever data they want no matter where it is stored.
- dragonwriter 4y ago> People are forgetting that Binance is not a US company nor a bank No, its an exchange, which among other things handles commodities, hence why the CFTC, not banking regulators, is suing.
- HWR_14 4y agowhich among other things handles commodities in the US hence why the CFTC
- dragonwriter 4y agoParagraph 3 (and other parts) of the complaint address the US nexus: Since the launch of its platform in 2017, Binance has taken a calculated, phased approach to increase its United States presence despite publicly stating its purported intent to “block” or “restrict” customers located in the United States from accessing its platform. Binance’s initial phase of strategically targeting the United States focused on soliciting retail customers. In a later phase, Binance increasingly relied on personnel and vendors in the United States and actively cultivated lucrative and commercially important “VIP” customers, including institutional customers, located in the United States. All the while, Binance, Zhao, and Lim, the platform’s former Chief Compliance Officer (“CCO”), have each known that Binance’s solicitation of customers located in the United States subjected Binance to registration and regulatory requirements under U.S. law. But Binance, Zhao, and Lim have all chosen to ignore those requirements and undermined Binance’s ineffective compliance program by taking steps to help customers evade Binance’s access controls.
- steveBK123 4y agoCryptobros are forgetting you can't run an unregistered derivatives exchange domiciled in US, OR taking USD, OR customers in US. It's pretty simple.
- seydor 4y agopretty sure you can take USD, you can have USD bank accounts everywhere (Not subject to US regulation, Eurodollar is a thing)
- steveBK123 4y agoif you transact in dollars, prepare to be subject to the long arm of US securities law
- vkou 4y agoPretty sure any bank that ever wants to receive or send a USD wire transfer from/to any other bank needs to play ball with Uncle Sam.
- selectodude 4y agoDollars held outside the US are absolutely subject to US regulation. The banks themselves are not subject to US banking capital requirements because they have no access to the federal reserve. If you commit a US crime with a dollar held overseas, you still fall under US jurisdiction.
- steveBK123 4y agothe brightest minds of a generation, encoding financial crime in their fintech startups, because they couldn't be bothered to hire a lawyer or read any basic financial history or media in their life
- mrguyorama 4y agoNo, they're doing it because they think they are special and clever and the US can't touch them. They wouldn't be having these discussions if they weren't already aware of what the law asks of them.