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The SEC was meeting with SBF and failed to protect US citizens who sent money to FTX. So far Binance hasn't pulled a ponzi scam (they existed before Alameda/FT

The SEC was meeting with SBF and failed to protect US citizens who sent money to FTX. So far Binance hasn't pulled a ponzi scam (they existed before Alameda/FTX and have never stolen anyone's money). So basically the SEC failed to protect people from that ponzi scammer boy SBF was, but they're going after the like of Binance and Coinbase, who, so far, never stole a cent from anyone?

Etrnl_President 3y ago
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eftychis 3y ago
I mean yeah, because there is money around to repatriate. In the SBF case by the time anyone realizes what was happening the money was "gone." Trying to reply why it will be that easy in this case perhaps. N.B. they were just granted an order; they need now to enforce it. That's a different "craziness."
meepmorp 3y ago
Or, they fucked up by not being sufficiently careful before, and now they're being more proactive.
LapsangGuzzler 3y ago
According to NYT, Binance was moving billions into accounts held in Seychelles, Lithuania and Kazakhstan etc. via two banks that failed earlier this year in patterns that resemble money laundering[0]. If Binance was laundering its funds through two banks that just went through liquidation, you can bet that auditors figured that out pretty quick. 0: https://www.nytimes.com/2023/06/07/business/binance-cash-bank-accounts.html https://www.nytimes.com/2023/06/07/business/binance-cash-ban...
- derefr 3y ago
  Patterns that resemble money laundering, but more closely resemble tax sheltering.
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  - LapsangGuzzler 3y ago
    The article alleges that at least one of the offshore companies was commingling customer funds, which Binance denies. I'm no finance guy, but that seems like a pretty easy allegation to back up if they've been deep into one of Binance's intermediary banks (which they have). The SEC has turned around 3 months after these banks collapsed and launched significant legal action against Binance and Coinbase, which says that what they found was serious enough to move really quickly against these guys. No idea what they found, but I have feeling we're all gonna be reading about it pretty soon.
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lost_tourist 3y ago
Or they walked like a duck and quacked like a duck but still said they were a turtle... I think this will all be very interesting when it's all said and done.
CydeWeys 3y ago
It's crypto. If you don't act in time the money is just gone. If they wait until Binance actually pulls the Ponzi it will be way too late.
pavlov 3y ago
How do you know Binance hasn't stolen anyone's money? Is there a reputable auditor's statement to that effect? Seems very unlikely when Binance pretends they're not even headquartered in any jurisdiction. Nobody has any idea about Binance's actual money flows and where customer funds have actually ended up.
- marcell 3y ago
  > How do you know Binance hasn't stolen anyone's money? In America you are presumed innocent until proven guilty. Therefore, under our legal system, Binance.US is presumed to not have stolen anyone's money until the SEC passes the burden of proving guilt beyond a reasonable doubt.
  - JumpCrisscross 3y ago
    > Binance.US is presumed to not have stolen anyone's money until the SEC passes the burden of proving guilt beyond a reasonable doubt These aren’t criminal charges. The standard is preponderance of evidence.
- x3sphere 3y ago
  We don't. But by the same token, these are just allegations so far. It is interesting however, the SEC purportedly has tons of evidence of wrongdoing at these exchanges but completely missed FTX which was a massive fraud. Color me skeptical, it's almost like they are saving face for missing FTX. FTX was even regulated to some extent -- I remember you were able to buy tokenized versions of US stocks on there.
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- rawoke083600 3y ago
  Honestly, they probably are making more money being the market leader than trying to steal money.
lolinder 3y ago
I take it as the SEC recognizing that they screwed up in watching FTX and now they're correcting. SBF was a golden boy the month before everything collapsed—it would be a mistake for anyone to assume that either Binance or Coinbase is above board just because they have a good reputation right now. The SEC is sending a message that the days of crypto exchanges being largely unregulated are over, and they're probably doing that because of how badly they screwed up with FTX, not in spite of it.
Nursie 3y ago
I mean, if you ignore the countless reddit threads about not being able to access funds because the moment you try, they spring more and more requirements on people, or just plain ghost depositors..... even if you ignore that, what coinbase is doing seems to go heavily against rules that govern exchanges and the securities they exchange. And Binance appears to be on the hook for various forms of fraud. Maybe they did never steal a cent from anyone, but there are more crimes than theft on the books.
PragmaticPulp 3y ago
> So basically the SEC failed to protect people from that ponzi scammer boy SBF was FTX was headquartered in the Bahamas for a reason. The SEC doesn't have jurisdiction over the Bahamas. It also takes time to build a case, which is difficult when FTX exploded and then collapsed so quickly. Binance.US and Coinbase both operate in the US, under the SEC's jurisdiction.
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deleted 3y ago
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acyou 3y ago
Speaking as someone who doesn't have any skin in the game. Just because to the best of our knowledge, Binance is fully solvent and can make all US depositors whole, doesn't mean that they won't declare bankruptcy imminently. That's a condition that could change at any time, as has been well demonstrated. I have a feeling Binance would also look a lot more like a ponzi scheme under subpoena with their asset values gone to zero, no?
- marcell 3y ago
  Do you have any reason to believe this? There are dozens of crypto exchanges, and most of the major ones have not become insolvent. FTX and MtGox are the only major ones to become insolvent and lose user funds. The top ones like Kraken and Coinbase and Binance have been operating without issue for many years.
censless 3y ago
> So basically the SEC failed to protect people from that ponzi scammer boy SBF was, but they're going after the like of Binance and Coinbase, who, so far, never stole a cent from anyone? Agreed. SEC should have given enough time to these two so that they could fleece people of their money, then declare themselves bankrupt and then have law enforcement go to other countries and have the culprits extradicted back. Finally have everyone shouting "SEC colluded with these culprits". I don't understand this rush to stop this from happening.
chaosbolt 3y ago
Binance has not only been more honest than FTX but also more honest than Coinbase. But this is HN and the people here are smart but lack the intellectual courage and honesty to challenge their beliefs, so they'll believe in things like "SEC trying to save the common investor" despite obvious examples like 2008, FTX, etc. They apply the same reasoning to war for example, they'll never talk about how comparable the US aggression on Iraq is to the Russian aggression on Ukraine, and will call you a Russian sympathiser if you point this out. This is expected and completely natural, humans will always find reasons why their actions are good and general just ways to explain their behavior, I think there are experiments that even show it on the biological level when they cut off the right from the left hemisphere. The SEC's attack on Binance and CB has been part of a multi year attack on cryptocurrencies, everyone here will criticize crypto really hard but never the fact the fed printed huge amounts of USD, causing inflation not only for US citizens but for every country that relies on the US for food and other imports (that are done in USD, so for example country X's reserve in USD is worth less now, and US exporters raise their prices, etc.) The people here will go to extreme lengths of mental gymnastics to say that the inflation wasn't caused at all by money printing but by covid disrupting the supply chain and by the Russian war.

Etrnl_President 3y ago

[dead]

eftychis 3y ago

I mean yeah, because there is money around to repatriate. In the SBF case by the time anyone realizes what was happening the money was "gone." Trying to reply why it will be that easy in this case perhaps. N.B. they were just granted an order; they need now to enforce it. That's a different "craziness."

meepmorp 3y ago

Or, they fucked up by not being sufficiently careful before, and now they're being more proactive.

LapsangGuzzler 3y ago

According to NYT, Binance was moving billions into accounts held in Seychelles, Lithuania and Kazakhstan etc. via two banks that failed earlier this year in patterns that resemble money laundering[0]. If Binance was laundering its funds through two banks that just went through liquidation, you can bet that auditors figured that out pretty quick. 0: https://www.nytimes.com/2023/06/07/business/binance-cash-bank-accounts.html https://www.nytimes.com/2023/06/07/business/binance-cash-ban...

derefr 3y ago
Patterns that resemble money laundering, but more closely resemble tax sheltering.
- deleted 3y ago
  [deleted]
- LapsangGuzzler 3y ago
  The article alleges that at least one of the offshore companies was commingling customer funds, which Binance denies. I'm no finance guy, but that seems like a pretty easy allegation to back up if they've been deep into one of Binance's intermediary banks (which they have). The SEC has turned around 3 months after these banks collapsed and launched significant legal action against Binance and Coinbase, which says that what they found was serious enough to move really quickly against these guys. No idea what they found, but I have feeling we're all gonna be reading about it pretty soon.
- deleted 3y ago
  [deleted]

lost_tourist 3y ago

Or they walked like a duck and quacked like a duck but still said they were a turtle... I think this will all be very interesting when it's all said and done.

CydeWeys 3y ago

It's crypto. If you don't act in time the money is just gone. If they wait until Binance actually pulls the Ponzi it will be way too late.

pavlov 3y ago

How do you know Binance hasn't stolen anyone's money? Is there a reputable auditor's statement to that effect? Seems very unlikely when Binance pretends they're not even headquartered in any jurisdiction. Nobody has any idea about Binance's actual money flows and where customer funds have actually ended up.

marcell 3y ago
> How do you know Binance hasn't stolen anyone's money? In America you are presumed innocent until proven guilty. Therefore, under our legal system, Binance.US is presumed to not have stolen anyone's money until the SEC passes the burden of proving guilt beyond a reasonable doubt.
- JumpCrisscross 3y ago
  > Binance.US is presumed to not have stolen anyone's money until the SEC passes the burden of proving guilt beyond a reasonable doubt These aren’t criminal charges. The standard is preponderance of evidence.
x3sphere 3y ago
We don't. But by the same token, these are just allegations so far. It is interesting however, the SEC purportedly has tons of evidence of wrongdoing at these exchanges but completely missed FTX which was a massive fraud. Color me skeptical, it's almost like they are saving face for missing FTX. FTX was even regulated to some extent -- I remember you were able to buy tokenized versions of US stocks on there.
- deleted 3y ago
  [deleted]
rawoke083600 3y ago
Honestly, they probably are making more money being the market leader than trying to steal money.

lolinder 3y ago

I take it as the SEC recognizing that they screwed up in watching FTX and now they're correcting. SBF was a golden boy the month before everything collapsed—it would be a mistake for anyone to assume that either Binance or Coinbase is above board just because they have a good reputation right now. The SEC is sending a message that the days of crypto exchanges being largely unregulated are over, and they're probably doing that because of how badly they screwed up with FTX, not in spite of it.

Nursie 3y ago

I mean, if you ignore the countless reddit threads about not being able to access funds because the moment you try, they spring more and more requirements on people, or just plain ghost depositors..... even if you ignore that, what coinbase is doing seems to go heavily against rules that govern exchanges and the securities they exchange. And Binance appears to be on the hook for various forms of fraud. Maybe they did never steal a cent from anyone, but there are more crimes than theft on the books.

PragmaticPulp 3y ago

> So basically the SEC failed to protect people from that ponzi scammer boy SBF was FTX was headquartered in the Bahamas for a reason. The SEC doesn't have jurisdiction over the Bahamas. It also takes time to build a case, which is difficult when FTX exploded and then collapsed so quickly. Binance.US and Coinbase both operate in the US, under the SEC's jurisdiction.

deleted 3y ago

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deleted 3y ago

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acyou 3y ago

Speaking as someone who doesn't have any skin in the game. Just because to the best of our knowledge, Binance is fully solvent and can make all US depositors whole, doesn't mean that they won't declare bankruptcy imminently. That's a condition that could change at any time, as has been well demonstrated. I have a feeling Binance would also look a lot more like a ponzi scheme under subpoena with their asset values gone to zero, no?

marcell 3y ago
Do you have any reason to believe this? There are dozens of crypto exchanges, and most of the major ones have not become insolvent. FTX and MtGox are the only major ones to become insolvent and lose user funds. The top ones like Kraken and Coinbase and Binance have been operating without issue for many years.

censless 3y ago

> So basically the SEC failed to protect people from that ponzi scammer boy SBF was, but they're going after the like of Binance and Coinbase, who, so far, never stole a cent from anyone? Agreed. SEC should have given enough time to these two so that they could fleece people of their money, then declare themselves bankrupt and then have law enforcement go to other countries and have the culprits extradicted back. Finally have everyone shouting "SEC colluded with these culprits". I don't understand this rush to stop this from happening.

chaosbolt 3y ago

Binance has not only been more honest than FTX but also more honest than Coinbase. But this is HN and the people here are smart but lack the intellectual courage and honesty to challenge their beliefs, so they'll believe in things like "SEC trying to save the common investor" despite obvious examples like 2008, FTX, etc. They apply the same reasoning to war for example, they'll never talk about how comparable the US aggression on Iraq is to the Russian aggression on Ukraine, and will call you a Russian sympathiser if you point this out. This is expected and completely natural, humans will always find reasons why their actions are good and general just ways to explain their behavior, I think there are experiments that even show it on the biological level when they cut off the right from the left hemisphere. The SEC's attack on Binance and CB has been part of a multi year attack on cryptocurrencies, everyone here will criticize crypto really hard but never the fact the fed printed huge amounts of USD, causing inflation not only for US citizens but for every country that relies on the US for food and other imports (that are done in USD, so for example country X's reserve in USD is worth less now, and US exporters raise their prices, etc.) The people here will go to extreme lengths of mental gymnastics to say that the inflation wasn't caused at all by money printing but by covid disrupting the supply chain and by the Russian war.