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One of the allegations in the complaint is that they did indeed encourage breaking the rule, walking high-value customers through the process of falsifying thei
by SpicyLemonZest 4y ago
One of the allegations in the complaint is that they did indeed encourage breaking the rule, walking high-value customers through the process of falsifying their location. For example, the CFTC has an alleged quote:
> VIP team member: Hi CZ . . . I went through list of affected API clients, it
includes a number of large strategic accounts including [a Chicago-headquartered
trading firm] who is currently is a top 5 client and 12% of our volume
> Zhao: Give them a heads up to ensure they don’t connect from a us Ip. Don’t
leave anything in writing. They have non us entities. Let’s also make sure we
don’t hit the biggest market makers with that email first. Do you have signal?
- seydor 4y agoUsing a US IP for trading is probably not illegal in itself, people travel. In another passage they are saying that their VIP customers created offshores to use for trading and that binance was notifying customers that looked like US to do the same. I am reading the evidence for entertainment and it seems a bit try-hard tbh
- SpicyLemonZest 4y agoRight. The CFTC's characterization of that behavior, which I think is correct, is that VIP customers created offshore shell companies to falsify their locations and Binance encouraged them to do so.
- tric 4y agoit's not uncommon for lawful hedge funds trading equities to have offshore shell companies. Employees of those funds have these types of accounts too. I only point this out because your comment read as if this was a smoking gun.
- seydor 4y agodepends, by that metric all the Swiss banks are illegal
- ironyman 4y agoNot to mention sophisticated trading firms are not necessarily sending orders/instructions from the same IP. A lot of them have multiple network interfaces set up for each exchange they're trading on.