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> How do you know? When Binance’s own Chief Compliance Officer was primarily in the business of helping customers avoid compliance, it doesn’t seem like they wo

by darawk 4y ago

> How do you know? When Binance’s own Chief Compliance Officer was primarily in the business of helping customers avoid compliance, it doesn’t seem like they would know very much about what ultimately went down on the platform. The complaint quotes an internal email that read: “We close our eyes.” I don't, but obviously the CFTC doesn't either, otherwise they'd have spelled it out. So, considering the party investigating is ignorant of any significant terrorist financing activity, I see no reason to think otherwise. > Binance was a major counterparty of Bitzlato, a crypto exchange that existed primarily for Russian money laundering: https://www.reuters.com/business/finance/binance-moved-346-m https://www.reuters.com/business/finance/binance-moved-346-m... There is nothing in the complaint stating that Binance knowingly facilitated any criminal activity of Bitzlato, afaik. The fact that criminal actors had an account at a financial institution is not prima facie evidence of any crime on the part of the financial institution, especially not for one that isn't registered in the US. Even for US registered entities, plenty of criminals have bank accounts. It's the bank's job to perform a certain level of diligence to stop them, not an infinite level of diligence. If the CFTC believed Binancing knowing facilitated criminal activity on the part of Bitzlato, that'd be in the complaint. It's not, therefore, they don't. Or at the very least, they have insufficient evidence for it. So any suggestion that significant terrorist financing is being stopped here is pure speculation, unsupported by anything in the document itself.

dragonwriter 4y ago
> I don’t, but obviously the CFTC doesn’t either, otherwise they’d have spelled it out. Or, they do know and more detail wasn’t relevant at the complaint stage of the civil case, whereas it might be to the actual trial and to the parallel criminal referral that it has been reported that DoJ is investigating. A civil complaint is not required to be, and generally is not, a catalogy of every piece of relevant information the filing party has. And it especially isn't a catalog of everything they know where a civil lawsuit isn't the venue for addressing it. > If the CFTC believed Binancing knowing facilitated criminal activity on the part of Bitzlato, that’d be in the complaint. No, if the CFTC believed that, it would be in the criminal referral to DoJ, and, if DoJ could support it to the required level to move forward, it would be in the criminal indictment DoJ would seek from an appropriate grand jury. Those typically lag considerably behind civil action from the same regulatory-body investigation (sometimes with indictments issued after the civil complaint is settled or otherwise resolved.)
- darawk 4y ago
  > Or, they do know and more detail wasn’t relevant at the complaint stage of the civil case, whereas it might be to the actual trial and to the parallel criminal referral that it has been reported that DoJ is investigating. > A civil complaint is not required to be, and generally is not, a catalogy of every piece of relevant information the filing party has. And it especially isn't a catalog of everything they know where a civil lawsuit isn't the venue for addressing it. Cool, so we're back at zero evidence of any of this happening. We agree then.
  - dragonwriter 4y ago
    The complaint as it directly relates that they (1) knew of patterns of criminal activity (including patterns of terrorist financing) and specific criminal actors on the platform, and (2) took specific steps to actively counsel specific customers involved in illicit activity on steps to evade detection of that activity. Now, its not “evidence” because a complaint isn’t a submission of evidence. But, taking the complaint at face value, it directly alleges that that is what has been happening, and that it is a consistent pattern (paras. 104-106). Now, this doesn’t go into much detail in this area, because its not a criminal complaint or indictment where this conduct is the central behavior being addressed, but it is very much in the complaint.
    - darawk 4y ago
      > The complaint as it directly relates that they (1) knew of patterns of criminal activity (including patterns of terrorist financing) and specific criminal actors on the platform, and (2) took specific steps to actively counsel specific customers involved in illicit activity on steps to evade detection of that activity. Let's not conflate events here. They did know about some patterns of criminal activity. Its not stated, as far as I know, that they actively aided/coached these people on how to evade anything. They also knew about the use of their platform by e.g. HFT companies based in the US who accessed it via shell company. They appear to have, to a limited extent, coached this group on what to do. This behavior is the primary substance of the CFTC's suit, not the criminal/terrorist/ransomware behavior. It's important that these things not be mixed up. The latter is utterly trivial, protects nobody, and it is the real substance of the lawsuit. The allegations of aiding and abetting crime are not the substance of the lawsuit, presumably because there is no significant evidence of it occurring.

by darawk 4y ago

dragonwriter 4y ago

> I don’t, but obviously the CFTC doesn’t either, otherwise they’d have spelled it out. Or, they do know and more detail wasn’t relevant at the complaint stage of the civil case, whereas it might be to the actual trial and to the parallel criminal referral that it has been reported that DoJ is investigating. A civil complaint is not required to be, and generally is not, a catalogy of every piece of relevant information the filing party has. And it especially isn't a catalog of everything they know where a civil lawsuit isn't the venue for addressing it. > If the CFTC believed Binancing knowing facilitated criminal activity on the part of Bitzlato, that’d be in the complaint. No, if the CFTC believed that, it would be in the criminal referral to DoJ, and, if DoJ could support it to the required level to move forward, it would be in the criminal indictment DoJ would seek from an appropriate grand jury. Those typically lag considerably behind civil action from the same regulatory-body investigation (sometimes with indictments issued after the civil complaint is settled or otherwise resolved.)

darawk 4y ago
> Or, they do know and more detail wasn’t relevant at the complaint stage of the civil case, whereas it might be to the actual trial and to the parallel criminal referral that it has been reported that DoJ is investigating. > A civil complaint is not required to be, and generally is not, a catalogy of every piece of relevant information the filing party has. And it especially isn't a catalog of everything they know where a civil lawsuit isn't the venue for addressing it. Cool, so we're back at zero evidence of any of this happening. We agree then.
- dragonwriter 4y ago
  The complaint as it directly relates that they (1) knew of patterns of criminal activity (including patterns of terrorist financing) and specific criminal actors on the platform, and (2) took specific steps to actively counsel specific customers involved in illicit activity on steps to evade detection of that activity. Now, its not “evidence” because a complaint isn’t a submission of evidence. But, taking the complaint at face value, it directly alleges that that is what has been happening, and that it is a consistent pattern (paras. 104-106). Now, this doesn’t go into much detail in this area, because its not a criminal complaint or indictment where this conduct is the central behavior being addressed, but it is very much in the complaint.
  - darawk 4y ago
    > The complaint as it directly relates that they (1) knew of patterns of criminal activity (including patterns of terrorist financing) and specific criminal actors on the platform, and (2) took specific steps to actively counsel specific customers involved in illicit activity on steps to evade detection of that activity. Let's not conflate events here. They did know about some patterns of criminal activity. Its not stated, as far as I know, that they actively aided/coached these people on how to evade anything. They also knew about the use of their platform by e.g. HFT companies based in the US who accessed it via shell company. They appear to have, to a limited extent, coached this group on what to do. This behavior is the primary substance of the CFTC's suit, not the criminal/terrorist/ransomware behavior. It's important that these things not be mixed up. The latter is utterly trivial, protects nobody, and it is the real substance of the lawsuit. The allegations of aiding and abetting crime are not the substance of the lawsuit, presumably because there is no significant evidence of it occurring.