SEC Sues Binance and CEO Zhao for Breaking US Securities Rules • Hacker News Board

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

#201

Post by ARandumGuy » Mon, Jun 05, 2023, 6:17 PM UTC

wslh wrote: post #110

I remember the last post from Fred Wilson: "The Freedom To Innovate" [1]. Even if the SEC is right about Binance and others, and there are without doubt blatant and huge frauds in Web3, there are huge problems with the financial modernization within the US (and the world). Domestic wire transfers in US takes longer and are more expensive than in Europe and developing countries such as Brazil and Argentina. The SEC is…

Just because the current system sucks doesn't mean a replacement will be better. Its the responsibility of people advocating for a replacement system to explain and demonstrate why it will be better.

Banks suck. But that doesn't mean crypto companies should have free reign to do whatever they want for the sake of "innovation."

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

#202

Post by PheonixPharts » Mon, Jun 05, 2023, 6:17 PM UTC

setgree wrote: post #148

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.

My theory is that Binance execs were having these chats in an encrypted medium (e.g. WA or Signal) but didn't secure themselves against a defector. I think someone on the inside took screenshots and went to the feds (or started cooperating under legal pressure). There's even a leading candidate [0]. What's funny about this is it's a fine metaphor for what ails crypto as a whole. The technology is cryptographically se…

> but didn't secure themselves against a defector

Still a surprisingly amateur move. Once worked for the Federal Government where literally everything you write is potentially subject to a FOIA request. The message all new hires were told was, very clearly: "Never put anything into writing you wouldn't be happy to be see published on the front page of the Washington Post"

Anything that was even vaguely close to failing this test was handled exclusively by a private phone call or, preferably, in person conversation.

And this was for an org that was doing nothing sneaky or underhanded in the slightest. Still if something could be misunderstood in a negative way, don't put it in text.

I'm still surprised when I see coworkers say things in slack, which is clearly able to be monitors by admins, that don't pass this test. Far more surprised when people knowingly engage in criminal activity and keep any kind of unnecessary record.

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

#203

Post by wslh » Mon, Jun 05, 2023, 6:19 PM UTC

JumpCrisscross wrote: post #184

wslh wrote: post #110

I remember the last post from Fred Wilson: "The Freedom To Innovate" [1]. Even if the SEC is right about Binance and others, and there are without doubt blatant and huge frauds in Web3, there are huge problems with the financial modernization within the US (and the world). Domestic wire transfers in US takes longer and are more expensive than in Europe and developing countries such as Brazil and Argentina. The SEC is…

> Domestic wire transfers in US takes longer and are more expensive than in Europe and developing countries such as Brazil and Argentina Fedwires take minutes and cost nickels [1]. If you use wires frequently, get an account that doesn't charge anything for them. (The Fed is launching FedNow [2]. It will cost 4.5¢ per transfer [3].) [1] https://www.frbservices.org/resources/fees/wires-2023 [2] https://www.federalrese…

I am aware of this option but it happen than not every financial service use them. Also, it is wondering than other countries where faster. Immediate payment account in Argentina exists since the late 90s and we are not talking precisely about a country with a good economy and financial system. Also take a look at the Brazilian Pix payment system [1] that provides a neutral code for payment where other services built on top.

[1] https://en.wikipedia.org/wiki/Pix_(payment_system)

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

#204

Post by srejk » Mon, Jun 05, 2023, 6:20 PM UTC

jdasdf wrote: post #197

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…

[flagged]

Words have definitions. Investment and profit, for two. You can't just handwave that away. Your conclusion is "anything could be anything" which is utterly devoid of any meaning.

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

#205

Post by shkkmo » Mon, Jun 05, 2023, 6:20 PM UTC

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.

Both a hitman and the hirer can both be consenting adults, but we still shouldn't make it legal for the hirer to give money to a hitman to kill someone.

Thus you agree that there are things that consenting adults should not be allowed to do with their money.

Edit: There are good points about how much freedom it is worth giving away to make it easy to catch this crime, but I have a hard time seeing an argument for it not being illegal.

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

#206

Post by olalonde » Mon, Jun 05, 2023, 6:21 PM UTC

shkkmo wrote: post #156

alphanullmeric wrote: post #108

Earlier quoted context omitted.

[flagged]

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.

An essential point to bear in mind in these crimes: each one involves a victim who is, crucially, not a willing participant. People who participate in buying or selling cryptocurrency are willing participants.

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

#207

Post by wslh » Mon, Jun 05, 2023, 6:21 PM UTC

ARandumGuy wrote: post #201

wslh wrote: post #110

I remember the last post from Fred Wilson: "The Freedom To Innovate" [1]. Even if the SEC is right about Binance and others, and there are without doubt blatant and huge frauds in Web3, there are huge problems with the financial modernization within the US (and the world). Domestic wire transfers in US takes longer and are more expensive than in Europe and developing countries such as Brazil and Argentina. The SEC is…

Just because the current system sucks doesn't mean a replacement will be better. Its the responsibility of people advocating for a replacement system to explain and demonstrate why it will be better. Banks suck. But that doesn't mean crypto companies should have free reign to do whatever they want for the sake of "innovation."

The point of my comment is about a political issue in financial systems. I don't specially care if the replacement is crypto or whatever other decentralized or centralized technologies move things forward.

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

#208

Post by webXL » Mon, Jun 05, 2023, 6:26 PM UTC

sebzim4500 wrote: post #195

misnome wrote: post #19

Finally some regulatory clarity

Not really, the only assets they have identified as securities here and the ones that were immediately obvious as securities (BNB etc.). They have made no statement regarding BTC, ETH, etc.

Gensler explicitly stated that BTC was a commodity about a year ago: https://www.benzinga.com/markets/cryptocurrency/22/06/278669...

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

#209

Post by wslh » Mon, Jun 05, 2023, 6:26 PM UTC

mikem170 wrote: post #179

wslh wrote: post #110

I remember the last post from Fred Wilson: "The Freedom To Innovate" [1]. Even if the SEC is right about Binance and others, and there are without doubt blatant and huge frauds in Web3, there are huge problems with the financial modernization within the US (and the world). Domestic wire transfers in US takes longer and are more expensive than in Europe and developing countries such as Brazil and Argentina. The SEC is…

> The Freedom To Innovate I'm not sure that innovation in finance has always been a good thing. Over the last 50 years we've seen increased levels of debt, increased college costs, increased housing prices, a bigger and more powerful rentier class, growing income inequality, leveraged buyouts, big business eliminating small businesses, hedge funds buying housing and hospitals, big tech buying up the competition, prof…

We don't know if innovation, in general, is a bad or good thing. We assume it is generally a really great thing. Innovation requires time, fifty years is nothing to conclude that the financial system should exist in the same way as existed before.

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

#210

Post by peyton » Mon, Jun 05, 2023, 6:27 PM UTC

JumpCrisscross wrote: post #184

wslh wrote: post #110

I remember the last post from Fred Wilson: "The Freedom To Innovate" [1]. Even if the SEC is right about Binance and others, and there are without doubt blatant and huge frauds in Web3, there are huge problems with the financial modernization within the US (and the world). Domestic wire transfers in US takes longer and are more expensive than in Europe and developing countries such as Brazil and Argentina. The SEC is…

> Domestic wire transfers in US takes longer and are more expensive than in Europe and developing countries such as Brazil and Argentina Fedwires take minutes and cost nickels [1]. If you use wires frequently, get an account that doesn't charge anything for them. (The Fed is launching FedNow [2]. It will cost 4.5¢ per transfer [3].) [1] https://www.frbservices.org/resources/fees/wires-2023 [2] https://www.federalrese…

Fedwire operates during extended banking hours only. Some people prefer to use crypto. It’s okay.