[HN Gopher] Binance investigated by CFTC over whether US residen...
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Binance investigated by CFTC over whether US residents trade on
platform
Author : f430
Score : 50 points
Date : 2021-03-12 17:29 UTC (5 hours ago)
(HTM) web link (www.bnnbloomberg.ca)
(TXT) w3m dump (www.bnnbloomberg.ca)
| xmly wrote:
| of course there are. They advertised heavily on Twitter and etc.
| 1996 wrote:
| Should Iran also investigate if Iranian residents trade on
| Binance? And if they do, why is it Binance responsability to bow
| to the Iranian government? And if they don't bow, why should
| Binance bow to the US?
|
| Conclusion: Team USA: world police.
| anonporridge wrote:
| Inflation of the dollar, which is used as the global reserve
| currency, is how the US extracts tribute from it's global
| empire.
| filoleg wrote:
| >Should Iran also investigate if Iranian residents trade on
| Binance?
|
| It isn't a matter of should. But they definitely could, if
| Binance operates in Iran, and they suspect Binance is doing
| something that is against the law there.
|
| >And if they do, why is it Binance responsibility to bow to the
| Iranian government?
|
| If they want to conduct business with Iran, then they have to
| take on that responsibility. If they don't care about
| conducting business with Iran, they are welcome to not listen
| to any demands and just walk away.
|
| >And if they don't bow, why should Binance bow to the US?
|
| If they don't bow, they won't be able to conduct transactions
| and business with US entities completely, such as banks and
| payment providers. Whether they should bow or not is up to
| whether they want to continue that relationship.
|
| For context, Binance DOES operate within the US, they just have
| a separate entity set up for it called Binance US that is fully
| compliant with US regulations and doesn't allow trading crypto
| derivatives (only regular crypto coins). Binance (the non-US
| one that allows derivatives) is self-blocking US users. The
| allegation is that despite all of that, Binance allowed
| derivative crypto trades to slip through the cracks in the US.
|
| If Binance doesn't comply and is at fault, then they are
| risking getting their Binance US entity prevented from
| operating in the US. This has nothing to do with world policing
| or anything like that. If the business you are conducting in a
| country doesn't comply with local regulations, you are running
| a risk of getting investigated and asked to either fix it up
| (if you were given such a chance depending on circumstances) or
| get out, as simple as that.
| bluesign wrote:
| Imagine Apple is investigated by regulators because some US
| people created UK account and downloaded some app not
| available in US.
|
| This kind of behavior is bad, doesn't matter which country
| does it.
| filoleg wrote:
| Assuming you are talking about a case where some app is
| illegal in US, but not in UK, as long as Apple has
| sufficient safeguards, they should be in the clear. For
| example, don't you need a valid address in another country
| to create an app store account there? Or maybe a credit
| card from that country? If yes, then that sounds like a
| sufficient safeguard.
|
| Not that it really matters, given I haven't heard of any
| Apple app store apps that are legal in UK but are
| explicitly illegal in the US. I remember there was a scare
| like that with TikTok/WhatsApp last year, but it never went
| through, so there isn't really a real life situation that
| could've set the precedent for such a thing.
|
| I don't doubt that once such a situation occurs, Apple
| might indeed get looked into by the regulators. Would be an
| interesting case to observe for sure. Either way, that
| hypothetical situation is much much less clear-cut than
| what's happening with Binance right now, though I can
| definitely see the similarities.
| bluesign wrote:
| Yeah the problem here is, US is expecting more than
| standard controls. Basically from the article, People
| from US trying more imaginative ways everyday.
|
| This shouldn't be necessary, or maybe LE should go after
| that people a bit too? I never heard any enforcement to
| US citizens doing this, but always regulatory pressure.
|
| PS: in Apple case, as long as app is free , you can
| create any account from any country. But regulators would
| not be able to show teeth there for sure anyway
| ketamine__ wrote:
| Or maybe Binance should put some effort (they are a tech
| company after all) into figuring out if a user is from
| the US instead of telling its users to use a VPN.
|
| I'm actually a BNB holder but the arguments here are
| silly.
| Ceezy wrote:
| Same here ->> https://news.ycombinator.com/item?id=26436558
| trident5000 wrote:
| Dont you dare trade derivatives because you're too stupid but
| please play the state sponsored lottery!
| [deleted]
| vmception wrote:
| this is the least productive use of energy
|
| there was a time when IP blocking was enough to satisfy
| regulators but now they're basically saying there is nothing a
| company can do
|
| one of the case studies in my ethics course during my Computer
| Science degree was about the regulators being satisfied with IP
| blocks and aware "determined" people could circumvent them due to
| the structure of the internet. that was a case 20 years ago.
|
| now they're saying that's not good enough? you don't have to be
| particularly determined to use a VPN but the state can just give
| better guidance or be more collaborative instead of adversarial
| ForHackernews wrote:
| > this is the least productive use of energy
|
| I agree! Proof-of-work cryptocurrencies are tremendously
| wasteful.
| vmception wrote:
| This is a discussion about the CFTC's use of public resources
| towards a completely offchain use case
| yowlingcat wrote:
| > there was a time when IP blocking was enough to satisfy
| regulators but now they're basically saying there is nothing a
| company can do
|
| Come on. KYC and AML laws are very well known and were put in
| place for a reason. When there are actual issues with
| regulation that could use reform and modernization, straw-
| manning negligence regarding the black and white parts that
| most of modern society unanimously agrees upon is always an odd
| tack.
| vmception wrote:
| This isn't about KYC and AML laws, this is about unregistered
| futures and swaps being _merely accessible_ by US residents.
| yowlingcat wrote:
| Don't be pedantic. It's /exactly/ about KYC. The spirit of
| preventing unregistered futures and swaps being "merely"
| inaccessible by US residents is to /prevent/ money
| laundering. That's the whole point of registering.
|
| Binance has a history of lax KYC [1]. For a global exchange
| to not risk blowing up means to gain affirmative proof of a
| user's legal identity, jurisdiction, tax residence. If you
| try and use an IP ban to loophole around having to add a
| robust KYC flow into your product, don't be surprised when
| a major governmental authority (and the general public)
| remain generally unconvinced that you did your best to be
| above ground.
|
| [1] https://cointelegraph.com/news/binance-sued-for-
| allegedly-fa...
| cltby wrote:
| > For a global exchange to not risk blowing up means to
| gain affirmative proof of a user's legal identity,
| jurisdiction, tax residence
|
| Financial stability is totally orthogonal to KYC.
| Exchanges that allow leveraged trading protect themselves
| via margin requirements.
| thebean11 wrote:
| How would this be a conduit for money laundering if you
| can't withdraw USD? Your still just stuck with crypto;
| I'm not sure how it gets you any closer to "clean" money.
| yowlingcat wrote:
| Great question. So money laundering consists of several
| phases -- placement, layering and integration. In
| particular, even if you can't withdraw USD, there's an
| enormous amount of movement you can conduct on platform
| which contributes to the layering phase. Even if you
| don't place or (to your point) integrate it on platform,
| you can still get quite a bit closer in the process.
| thebean11 wrote:
| So using it as a BTC mixer essentially?
| vmception wrote:
| hi, I started this subthread. it is very easy to money
| launder with crypto and isn't the crux of my argument. my
| argument is simply that this case is about unregistered
| futures and swaps being traded in US jurisdiction, and
| that its not about aml/kyc.
|
| to your question, "if you can't withdraw USD?" is very
| limiting and seems based on heavy misconceptions about
| both money laundering and a limited idea of utility of
| crypto, not sure where to start there. the other person's
| response talks about reintegration which is a very
| accurate tip of the iceberg. layer and reintegration is
| much easier with crypto.
| vmception wrote:
| US registered futures and swaps have a KYC/AML component
| and obligation.
|
| The CFTC's case is about Americans accessing unregistered
| futures and swaps, and with this case they have created
| no latitude for any company to exclude Americans so that
| they would never establish jurisdiction.
|
| The point is that this AML/KYC "debate" is a complete red
| herring. It is inherently a component eventually, but not
| really. Even if they did force AML/KYC before any kind of
| trading, then it's still Americans trading unregistered
| futures and swaps. So you see, unless the CFTC says
| "we're coming after you because of the lax AML/KYC" then
| its not about AML/KYC. Could they force AML/KYC and then
| say "ah you're American you can't trade", sure. Could an
| American use a fake ID and the CFTC uses that to
| establish jurisdiction, sure.
|
| So the productive thing here would be for the CFTC to be
| more collaborative and say exactly what the exact
| threshold a non-US organization can have to be in a safe-
| harbor with the CFTC.
| ketamine__ wrote:
| So because someone might use a fake ID you think Binance
| shouldn't be responsible for doing it in the first place?
| akyu wrote:
| It is about KYC. This is how they get their foot in the
| door.
| yowlingcat wrote:
| Yep, that's my exact point. That's what makes KYC such an
| important obligation from the firm's standpoint because
| the only way you can prove that you did everything within
| your power to obey it is to require it before the user is
| allowed touch any kind of asset on platform.
| wickoff wrote:
| As far as I know leveraged trading isn't accessible to
| Binance users without KYC.
| ecuaflo wrote:
| wow where did you go that taught tech ethics 20 years ago!?
| that's hard to find anywhere 20 years later, and even harder to
| find in that type of depth
| BitwiseFool wrote:
| I'm starting to assume malice rather than stupidity when it
| comes to the US Government and it's online regulations. I feel
| like this investigation will serve to push even more stringent
| requirements for US based KYC/AML and identity verification
| across all online trading platforms.
|
| Edit: Malice, in the sense that the United States can force its
| regulations on foreign entities without going through
| traditional diplomatic channels. I see this as a power-grab.
| [deleted]
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(page generated 2021-03-12 23:01 UTC)