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SEC Sues Binance and CEO Zhao for Breaking US Securities Rules

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Re: SEC Sues Binance and CEO Zhao for Breaking US Securities Rules

#191

Post by monero-xmr »

vkou wrote: post #135
monero-xmr wrote: post #21

Earlier quoted context omitted.

Comingling customer funds with their own personal and corporate funds to use for their own gain

Note: Even when nothing bad actually happened, this exposes customer funds to risk . It's fraudulent for me to promise to store your car in a garage, but then take it on a 140 mph joyride down the freeway.

Even if they didn't literally use customer funds to buy yachts and mansions, I have heard about pledging customer funds as collateral or using them for an acquisition which is then paid back using funds and revenue of the acquired company. It's sketchy shit that is not allowed in the regulated world that crypto companies have played loose with. Very dangerous.

Re: SEC Sues Binance and CEO Zhao for Breaking US Securities Rules

#193

Post by lijok »

z3c0 wrote: post #172
shkkmo wrote: post #156

Earlier quoted context omitted.

Easy agree. There are all kinds of things you can do with money that should be (and are) illegal. Hiring a hitman should be illegal. Buying slaves should be illegal. Bribing the court system should be illegal. This is not to say that every restrictions is justified, but taking the stance that no restrictions are justified is advocating anarchy.

Being a hitman should be illegal. Selling a slave should be illegal. Accepting a bribery should be illegal. Chop the trunk, not the branches.

[flagged]

Re: SEC Sues Binance and CEO Zhao for Breaking US Securities Rules

#194

Post by pcbro141 »

gadnuk wrote: post #40

> In one instance, the Binance chief compliance officer messaged a colleague that, “[w]e are operating as a fking unlicensed securities exchange in the USA bro.” Source: https://twitter.com/JohnReedStark/status/1665748594421297152 This is a legendary quote from the filing.

https://twitter.com/SECGov/status/1665779371108335618

SEC just tweeted the quote

Re: SEC Sues Binance and CEO Zhao for Breaking US Securities Rules

#196

Post by lottin »

mgamache wrote: post #86

Operation Choke Point 2.0 Continues https://cointelegraph.com/news/nothing-is-a-coincidence-with...

For the financial system dealing with cryptocurrencies isn't worth the risk. The banks would have to perform all sorts of AML/CFT checks on every penny that has come into contact with an exchange, and they just don't have the resources to do that.

Re: SEC Sues Binance and CEO Zhao for Breaking US Securities Rules

#197

Post by jdasdf »

dontreact wrote: post #91
jcranmer wrote: post #81

Earlier quoted context omitted.

The definition of "security" is pretty objective (Howey test), but the answer it produces tends not to be liked by people in the crypto space, so they argue hard about why it's not a definition of security. What quotes like these do is make it trivial to prove the mens rea (intent) requirements, and put a lie to claims that they didn't know it was a security or that their interpretation as not-a-security was reasonab…

Putting this here in case it's useful. Please correct if it's wrong. What is the Howey test for whether something is a security? """ The Howey Test asks whether a transaction constitutes an "investment contract," which is a type of security. If it is an investment contract, it must satisfy four criteria: It is an investment of money. The investment is in a common enterprise. There is an expectation of profits from th…

[flagged]

Re: SEC Sues Binance and CEO Zhao for Breaking US Securities Rules

#198

Post by toast0 »

itake wrote: post #102
dontreact wrote: post #91

Earlier quoted context omitted.

Putting this here in case it's useful. Please correct if it's wrong. What is the Howey test for whether something is a security? """ The Howey Test asks whether a transaction constitutes an "investment contract," which is a type of security. If it is an investment contract, it must satisfy four criteria: It is an investment of money. The investment is in a common enterprise. There is an expectation of profits from th…

who is buying crypto and not expecting to make a profit from it?

People using crypto for funds transfer. Buy now, transfer immediately, with an expectation that the other end sells immediately. No desire or expectation of profit.

Re: SEC Sues Binance and CEO Zhao for Breaking US Securities Rules

#199

Post by JumpCrisscross »

z3c0 wrote: post #172
shkkmo wrote: post #156

Earlier quoted context omitted.

Easy agree. There are all kinds of things you can do with money that should be (and are) illegal. Hiring a hitman should be illegal. Buying slaves should be illegal. Bribing the court system should be illegal. This is not to say that every restrictions is justified, but taking the stance that no restrictions are justified is advocating anarchy.

Being a hitman should be illegal. Selling a slave should be illegal. Accepting a bribery should be illegal. Chop the trunk, not the branches.

> Being a hitman should be illegal

You don't see any reason why hiring a hitman should also be illegal?

Re: SEC Sues Binance and CEO Zhao for Breaking US Securities Rules

#200

Post by anonporridge »

GenerWork wrote: post #117
legitster wrote: post #62

Is there any indication that eventually Bitcoin and Ethereum don't eventually get pulled into the "unlicensed security" category?

My understanding may be off, but I believe that Bitcoin will be able to avoid it but Ethereum may have a harder time due to the fact that contracts are pretty much baked into ETH at a basic protocol level. I'm sure if I'm wrong someone will correct me.

Ethereum will have a harder time because they launched it with an ICO, sought out investors, and the Ethereum foundation explicitly allocated themselves a share of the initial coins. AND now after the migration to proof of stake, ownership of Ether effectively gives you voting rights and administrative control of the network, not unlike a security.

Bitcoin was open and permissionless day one for anyone to mine, and Satoshi gave themselves no artificial privileges. The genesis block reward was unspendable. In practice, Satoshi ended up with a huge pile of the coins, but there was nothing that could have prevented the unavoidable obscurity and lack of awareness of such a novel and unproven project. Ownership of coins also doesn't convey any direct administrative privileges in the network. And of course, initially the coins weren't worth anything.

There aren't any reasonable arguments that bitcoin is a security, while there are reasonable arguments that ethereum is.

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