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

#121

Post by [deleted] » Mon, Jun 05, 2023, 5:39 PM UTC

johndhi wrote: post #69

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.

what's stupid is that quotes like this, not actual substance of what their business practices are, are the only way the SEC can establish what is and isn't a "security." there is no real truth or objective test and the SEC has offered no meaningful guidance. so they just determine this based on subjective emails the CEO sent once.

[deleted]

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

#122

Post by JumpCrisscross » Mon, Jun 05, 2023, 5:39 PM UTC

johndhi wrote: post #69

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.

what's stupid is that quotes like this, not actual substance of what their business practices are, are the only way the SEC can establish what is and isn't a "security." there is no real truth or objective test and the SEC has offered no meaningful guidance. so they just determine this based on subjective emails the CEO sent once.

> no real truth or objective test and the SEC has offered no meaningful guidance

The securities allegations revolve around BNB's ICO. Binance is being sued by the CFTC in respect of its Bitcoin and Ethereum trading.

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

#123

Post by I_am_tiberius » Mon, Jun 05, 2023, 5:39 PM UTC

2OEH8eoCRo0 wrote: post #105

I_am_tiberius wrote: post #90

Not a Binance fan but in this context, and considering the SECs unwillingness of declaring when cryptocurrencies are securities or not, it's pretty clear that they go after Binance for strategic reasons. Not sure but I assume this is controlled by the Biden admin.

Isn't that one of the benefits of a lawsuit? The law is tested and needs to hold up under scrutiny.

Definitely not when the party who is suing you is the one that defines the rules. Thinking about the scenario of this lawsuit makes me really angry. It's some sort of power demonstration backed by a political strategy.

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

#124

Post by SketchySeaBeast » Mon, Jun 05, 2023, 5:40 PM UTC

codetrotter wrote: post #116

itake wrote: post #102

Earlier quoted context omitted.

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

> who is buying crypto and not expecting to make a profit from it? Me. I put my savings in Bitcoin because I dislike the tradfi system. All I want is to be in control of my savings and to be able to freely transact with anyone anywhere in the world. I am still affected by the exchange rates to USD and EUR. But the hope is that in the future I will be able to use BTC directly more often and not even have to touch USD…

> Perhaps one day even my country will get with the times and allow me to pay my taxes in BTC directly instead of having to exchange it to government funnymoney first.

Something tells me your government cares more about their funnymoney than yours.

I can't imagine a government wanting to take on the volatility of bitcoin for a tax payment. What possible compelling argument is there for them to do that?

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

#125

Post by JumpCrisscross » Mon, Jun 05, 2023, 5:41 PM UTC

mgamache wrote: post #86

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

> Operation Choke Point 2.0 Continues

Would a web3 proponent getting a traffic ticket also count?

We have documented evidence of clear, willful violation of the law. And nobody is seriously mooting a CBDC anymore. (Given Silvergate was (a) downed by FTX and (b) the proximate cause of our recent banking meltdown, it is reasonable to argue Chokepoint 1.0 didn't go far enough. But that's irrelevant to this thread.)

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

#126

Post by alphanullmeric » Mon, Jun 05, 2023, 5:41 PM UTC

misnome wrote: post #118

alphanullmeric wrote: post #94

[flagged]

I think you just found four ways to describe money laundering and sanctions violations. Which admittedly is a market crypto has been trying and succeeding for quite a while to own.

[flagged]

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

#127

Post by misnome » Mon, Jun 05, 2023, 5:41 PM UTC

kgwgk wrote: post #44

linusg789 wrote: post #26

Correct original link: https://www.bloomberg.com/news/articles/2023-06-05/sec-sues-... Archive: https://ghostarchive.org/archive/TiwuL

In what sense is the link submitted incorrect?

There was a second thread, since merged, where the link was moved so 404’d

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

#128

Post by khuey » Mon, Jun 05, 2023, 5:41 PM UTC

mgamache wrote: post #109

CPLX wrote: post #89

Earlier quoted context omitted.

https://www.sec.gov/corpfin/framework-investment-contract-an...

Coinbase and the Howey test https://www.coinbase.com/blog/coinbases-staking-services-are...

According to a court of law or according to Coinbase?

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

#129

Post by axus » Mon, Jun 05, 2023, 5:41 PM UTC

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…

Maybe profit is the modern-day perception of why you'd buy crypto-currency. All I could hope for would be for the tokens to be kept secure and available for spending, that's already a high bar.

I can see the argument against proof-of-stake, doesn't your quantity of tokens increase without doing anything?

The way I see it, other crypto-currencies only have the payment-processing system component. There's no expectation that some "Bitcoin corporation" is working hard to increase the value of individual bitcoins. It's like buying Chinese currency, the promise is that you can spend it in some places more efficiently than dollars, not that China is working hard to make a yuan/renmenbi worth more than a dollar.

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

#130

Post by nafey » Mon, Jun 05, 2023, 5:42 PM UTC

tedivm wrote: post #58

jeroenhd wrote: post #50

Earlier quoted context omitted.

I get why you would say something like that in astonishment. By why would you ever send that out over a medium that'll leave a paper trail? Thank goodness that criminals aren't very smart. Their idiocy is doing society a huge favor.

Oh that's easy- this was the compliance officer, and by showing that he raised concerns over this he may be able to claim that he did his job as best he could under the circumstances. I'd need to see the rest of the context, but this could very well be a "cover your ass" message. Imagine if you're a security officer at a company and were just overridden on a decisions- you'd definitely want to shoot off an email desc…

I am wondering if raising objections internally will be sufficient in this case. As a leading executive at Binance shouldn't he be expected to report any malicious activity to the authorities?