Binance founder Changpeng Zhao agrees to step down, plead guilty

Considering an idea without agreeing with it might be one of the better modern definitions of curiosity.

I don't think doing less crime was ever on the table for these guys.

Free and unrestrained insight into the ruthless and the sociopath minds is half the reason I come here.

As long as those who are affected by some kind of loss are (reasonably) made whole, most legal systems won't give a flying f..k about anything.

> Lim also acknowledged in February 2020 that some of Binance’s customers, including those from Russia, were involved in illegal activities, according to the complaint. Lim wrote in a chat message about those trades: “Like come on. They are here for crime.” Money Laundering Reporting Officer at Binance responded at the time, “we see the bad, but we close 2 eyes.”

https://archive.is/Q8uu3

Probably the information that they (Binance) will share is really valuable to US.

Could we make a connection about Binance, and now Kraken prosecution with what happened after 9/11 where US pressed countries such as Switzerland to remove bank secrets? [1]

[1] https://www.cnbc.com/2023/03/24/swiss-claim-the-us-banking-c....

Correct, I don't know why this is the top comment when it's so wrong.

There is a restitution process for victims of Federal crimes. One may make a case that the victims of SBF & CZ's malfeasance may be eligible for restitution. IANAL.

Looks like it, and also seems like BS.

SBF was convicted ~2 weeks ago and a Section 35B (federal cooperation and substantial assistance) doesn't go through that quickly, unless SBF started cooperating against CZ before his conviction.

And it sure didn't seem like SBF was interested in cooperating in any way pre-conviction.

that's what fines are for.

most people criticize fines as a mere check for the offender belonging to some moneyed elite and nothing else.

fines are not replacement for civil law. if anyone think they were wronged, that's the only way. not a magically proactive government becoming their patents.

Rumor is that FTX is not that awful financially right now, because of their Anthropic investment.

Everything fails eventually.

Depends if buying FTX would have stabilized the price of their FTT coin. That would have filled in some of the hole. And then CZ wouldn't have had to step down

I've seen analyses showing even without CZ it was just a matter of time before the house of cards collapsed.

"It's only when the tide goes out that you see who's swimming naked". The tide was going out even without CZ's actions. And FTX was swimming naked to the bone.

So there is good con and bad con?

Did you every track their tokens? The price of movement of the short and long coins was very dubious. Binance at points allowed up to transfer and 1 BTC without registration, therefore enabling a lot of shady characters to trade on their platform. A lot of scammers and fraudsters were using binance as their preferred platform.

Yes

That's obviously not what is meant by 'con', though. It's just composed of first gaining the trust of someone and then defrauding them. Forcing has nothing to do with it and would likely rule out the application of the term, since trust is an integral part of all cons. There has been no fraud yet proven, so it can't conclusively be called a con. On the other hand FTX can be called a con, as there was fraud. This is just running an overly unregulated exchange, which is still a crime but isn't fraud. This doesn't end the investigations though, there is an SEC probe into fraud by Binance still going on so while it currently can't be called a con, really, it's also the case that it could be in the future. Also, it can technically be said that Binance has taken commission and largely made its money from cons of other people that they simply enabled and took fees on, which wouldn't necessarily be incorrect. Whether that's illegal depends on whether there was conspiracy – you wouldn't indict BoA for wire fraud just because someone else used them to do wire fraud.

I am not aware of evidence that he conned someone, but as a side quibble:

>Did someone force you to use Binance?

Do you understand what a con is? People are usually 'conned' because they are tricked into trusting someone that they shouldn't, when people are forced we typically refer to it as robbery or similar.

He didn't con me as I knew from the beginning that crypto currency itself is a con. CZ profited from his con job when he sell people stuff at stupidly high price knowing it actual worth nothing.

In case this is too hard for you to understand, try this - if I walk alone the street selling people paper with your name signed on it promising that such "magic sheet" is going to bring them unconditional happiness and I manage to sell millions of such sheets with a profit of billions, is that a con job?

This is exact what CZ did. He was/is/will always be remembered as a con man.

I saw a friend being added to a Binance WhatsApp group with tens of actual Binance users, clearly violating GDPR, where bots (you could tell by the phrasing and the account name) and Binance moderators were chatting about how to invest and much money they made.

This was ~2 months ago.

Can you elaborate more? I do not know anything about Yi and how she is a cofounder.

Sorry, I meant places where Binance is not licensed. This is most of the countries they operate in.

Yeah. China is weirdly regulated with no standard.

One misstep and you wish you could be prosecuted in US instead.

Just put the fixed IP addresses for the various archive.?? domains in your hosts file. This completely resolved the problem for me.

Its cloudflare dns

I have a lot of trouble when I use the search on archive.is, even if I use different DNS providers.

One trick that might help: I have found if I use a bookmarked page from archive.is, I can get to that. From there I can put in the original URL in the "Saved from" bar, and hit "Search", then I can usually get to an archive of the article.

I think it’s more general than this, but I have a hunch that iCloud private relay sets off the security gremlins.

To fix this in Firefox

Settings | Privacy & Security | DNS over HTTPS | Increased Protection | Choose Provider | NextDNS

Yes! Only happens on archive.is for me.

Same

no problem for me on nextdns

Every move SBF made after his fall seemed extremely poorly thought out.

Not a hater, just processing the dichotomy of his genius image with his ingeniously ungenius self-immolation.

Lesson: Looking like you make lots of money makes you look very smart.

Non-extradition doesn't mean the US can't request an extradition. It means each request is a one-off and there's not a process agreed on in a treaty.

Yeah he played it very well.

He's essentially getting off with a slap on the wrist, 50m is nothing given his wealth. The fines against the company are also a pittance compared to Binance's annual revenue.

The moral for white collar criminals is: if you get caught, just cooperate and pay up, and live up crime another day. The cost of the fines is trivial.

It's obviously just speculation but someone in his position could very easily siphon off a few million in BTC/crypto at the very least, and almost impossible to detect/trace if done well

> What billions will he wind up with?

You can pretty trivially check Binance's declared funds here: https://www.binance.com/en/proof-of-reserves

By my calculations they have >$6 billion in excess of customer deposits. Since he owns Binance, he principally owns those profits.

Adam Neumann is still getting huge financing. There is always a way to keep hustling.

Haha, I was actually referring to being a US fugitive as the miserable life, which Zhao obviously wants to avoid.

I think he's relieved that he won't get lifetime prison, and even years in prison.

Living at the top, to having no freedom must be very, very hard to stomach. I would take the deal too if I was CZ.

Giving up some "power-grab addiction" for 100% freedom (and being a billionaire still), seems very good for him.

As another person pointed out, he may have seen the catastrophe that SBF created, and decided cooperation was the best way to avoid that. Perhaps I was shocked due to Zhao's general hubris.

He does face 18 months in prison with the sentencing in Feb.

Dubai can offer an INSANELY AMAZING lifestyle for billionaires. Like, anything your debaucherous heart desires, forever. No consequences.

Adolf Eichmann says hi.

There are so many people who do not want to show up in the US (or elsewhere) and are living in Dubai that I would not be too worried. There is a full spectrum from former businessmen to current warlords.

Dubai has a lot to lose by damaging its reputation as a safe haven for wealthy exiles. My 2c.

I suspect that the threat of something similar to Global Magnitsky Sanctions (cutting them off from all dollar-denominated accounts everywhere) is a pretty big stick to use in negotiations. For a financial firm like Binance, access to bank accounts that can send dollars to and from US firms is pretty important, even without any US customers at all (losing access to banking in France, Cyprus, etc. would be equally difficult for them).

The US has recently (gradually over the past 20 years or so) started to really weaponize access to dollar-denominated accounts, essentially conscripting all the banks that want to do business with American banks into service of American foreign policy goals. This started in the aftermath of September 11th, for terrorism, then spread with the Magnitsky act of 2012 to include international corruption, and has slowly spread to more and more areas. So far the US has been somewhat judicious about using the tool- they seem to be aware that if they use it too often people will eventually just build ways around it- but it is a pretty big threat to wield against a company that absolutely needs to do business with somebody's banks.

The rumour about Binance indictment by DoJ has been going around for 1-2 years now. Its one of the last remaining pieces of major news that could have potentially negatively affected the industry. After two years of prosecutions, regulatory uncertainty and general poor market conditions, its only now starting to feel like there's light at the end of the tunnel.

More specifically now you can get actual real money by putting your savings in a bank account (and most people are struggling to pay the increased cost of living), there's less incentive to throw it away in a casino.

There were reward halvings in 2012, 2016, and 2020. I thought the 2012 halving was the most uncertain, as it was the first and the market had little liquidity.

https://www.fidelity.com/learning-center/trading-investing/b...

Actually ... since the trial ended, FTT went from ~$1.2 to ~$3.5 and has stayed up. I have no idea how these people expect it to pay out. Even if FTX restarts, they will almost certainly cast off such liabilities with the approval of the bankruptcy court.

"True crypto has never been tried"

Poe's Law and all.

yup Tether is the biggest fake money printing machine that keeps BTC afloat

The ETF will have to be approved BEFORE Tether is brought down. The powers that be need a way to control the price, an ETF is the easiest but until then they have Tether.

Why else would the US allow the largest counterfeit money printer to continue for long?

The simplest answer is that alot of people would like to hold BTC in a tax advantaged account and an ETF wrapper is the easiest way to do this.

Others would like to buy it via retirement plans and having an ETF makes this doable.

Those that want to hold BTC incase the US dollar collapses will hodl their own BTC.

Those that want to hold BTC incase it really appreciates will hold it via an ETF in a tax advantaged account so they don't have to pay taxes on their gains, depending on the account type.

> Why does BTC need an ETF at all, doesn’t that defeat the purpose of owning one’s own wallets? Also… exchanges defeating the purpose of decentralization…

Many financial institutions do not care about decentralization, but they do care about investing in an asset where they do not have to worry about managing the asset (in that regard, similar to REITs). Having the asset insured against various types of malfeasance is also a requirement for investments by many institutional funds.

Many foreign-currency ETFs exist. Euros, or yen, or dollars can function as currencies even though some people also view them as investments.

Commodities are similar. People might invest in pork bellies even if they don't personally eat bacon.

Your question is absolutely appropriate, as the original vision was not to have care about dollar values and instead use BTC as money.

But now the speculators have taken over, and all that really matters is what BTC is worth in dollars.

>Total US retirement assets were $36.7 trillion as of June 30, 2023, up 3.1 percent from March 31, 2023. Retirement assets accounted for 31 percent of all household financial assets in the United States at the end of June 2023.

I don't think experience shows most people should or want to own their own wallets. And transactions are much easier without owning one. If you just want BTC exposure as an investment an ETF is much better.

The purpose of decentralization was defeated a long time ago, I'm afraid.

How does it help clear the bad image? There are seemingly no large crypto orgs left that are untouched by criminal convictions.

Like gold ETFs, they can do BTC synthetically via futures or have a custodian take custody.

The interesting ETF will be for Ethereum because a custodian can possibly stake it and earn yield. ETH can earn within the basic protocol.

Well, BTC isn't some asset that doesn't have a track record of growth. Take a look at the rate of growth in last decade. Yes if you look in specific timeframes it will look like a wreck. but looking at a bigger picture it makes sense. And it is given that it will keep growing similarly in the long term (Why?, thats a separate lengthy conversation the answer to which also answers why some of largest finance players are rushing to put out an ETF of BTC)

Coming to the security and safety part. In theory, BTC was made with a intension to be easily usable and accessible. Once you understand it, its pretty simple and straightforward (even easier than using a bank's service). No level of hardware wallet failure will compromise the funds because the funds are not in the wallet rather the record of the funds are in 100s of thousands of BTC nodes that is being run by miners and other enthusiasts. The real threat may be letting people that share OTPs to scammer handle their private key and seed phrase. Thats where custodians like coinbase comes in.

And to the point of how to make sure the fund held by ETF/Custodian is actually there or not, This can be easily verified. Tt is a public ledger and anyone with the public key can see how much funds are held in the wallet. This aspect of transparency is one of the key selling point of BTC.

I would recommend a short and interesting read - "Inventing Bitcoin".

I believe the fee = the ETF holds bitcoin securely for you instead of you having to deal with wallets.

Coinbase would be the custodian

Binance is also accused of commingling funds.

Crypto is pretty centralised thanks to these exchanges and many blockchains running solely on AWS such as Ethereum.

Crypto being ‘decentralised’ is a well known myth.

Have any numbers on this? The only numbers I could find are very modest[1]. IIRC Zeke Faux, the author of "Number Go Up" also noted that adoption is very illusory - like the "Accepts Bitcoin" stickers you see all over the place Canada when there's no functioning bitcoin payment processing inside.

But besides all that, I think it's criminal to leave people in underdeveloped countries at the whims of unaccountable central-bank-style institutions like USDT. What will proponents of this crap say if/when USDT collapses? "They knew the risks"? Is the "crypto community" going to bail out people who invested their life savings in this garbage[2]?

[1] https://www.chainalysis.com/blog/latin-america-cryptocurrenc...

[2] https://old.reddit.com/r/AxieInfinity/comments/10ovcoo/lost_...

Probably because the brave new world of cryptopunk anonymity and liberation has turned into this mess of fraud and in-your-face centralisation and crime.

I imagine HN in particular is also quite dominated by traditional US finance.

I honestly don't remember the time you are describing. As far as I can remember, the most prevalent voices about crypto from HN have been from the naysayers by far. The craze just simply isn't there anymore, which is a very good thing. People who refuse to try and understand cryptocurrencies but tout fanciful things about them shouldn't be the ones representing them.

They would've also been worlds better if they had parked their money in Gamestop, or honestly even in a casino, but that doesn't make it a sound investment

Because he's salty about it, the comment doesn't point at anything else

"This is good for Bitcoin"

Everyone else assumes this has something to do with crypto.