Don't they have a dedicated binance.us version? Its "Licenses" page[1] lists licences from multiple US states and Guam. It is registered as "BAM Trading Services Inc."
They are a singapore company jurisdictian wise, whole city is by now just a chinese front, to avoid the embargos and hostilitys of us and chinese relations.
(Similar to vietnam as final assembly place for cellphones, to avoid made in china).
So its a party company, out there to keep a eye on the syphoning of funds out of china by the rich.
Former founder "vanished" like so many not party animals.
I'm just playing devil's advocate here but - If you control the people that run the capital flight operation, then you control who can flight capital. That may be appealing to you if you're a high enough power and want to be able to move your capital but not let the peasants do it.
Partial escape makes all those bribes and paid money for loyalty worth anything.
Otherwise, there is no justice system, so even a billionaire can vannish over night, making all the money in the world worthless. What good is it to be a party official, if you can not garantee that your children and spouse are in safety and better off at least.
Not sure about the China angle, but if he's in Singapore he may be safe. Allegedly the Singapore-US extradition does not cover money laundering [0]. Although, I'm not sure if this will count as Fraud or Money Laundering.
True or not, comments like that add literally zero to the conversation. What happened with following "Be kind. Don't be snarky. Converse curiously; don't cross-examine. Comments should get more thoughtful and substantive, not less, as a topic gets more divisive."?
If the transfers came from Binance.US (BAM) and all client money is held by Prime, then it is very unlikely that the transfers were client money.
>"Where are those funds coming from?" she wrote in one message.
>In a response to Coley, seen by Reuters, the Binance executive, Susan Li, did not explain the transfers. Li wrote that Merit Peak was a "vendor that facilitated trading" on Binance.US and also provided loans and capital injections to the American exchange.
So Li DID explain the transfers?! It's not unusual for separate entities to market make, supply liquidity etc for exchanges, especially small, new exchanges like Binance.US in 2020/2021. And they get paid accordingly like any company rendering services.
This is a similar structure to how FTX and Alameda started off. But there is nothing dodgy about that structure per see. It is the same structure that Trad-Fi exchanges use. The issue is when (a) the market maker starts betting and losing money and (b) customer funds are used to bail it out. (a) is the problem and (b) is the criminal solution...
To be clear: I am not saying Binance is 110% above board, solvent, etc. Just that there is zero evidence otherwise here.
Yeah, we need decent regs for Crypto. It's not even rocket science, we're just stuck between 2 extremist camps: "ban everything" and "regs are evil" camps.
I hoped FTX would lead to basic common sense stuff but it hasn't...
The problem is that if you regulate crypto enough to stamp out the blatant scams, fraud and self-dealing then it loses most of its appeal over other financial products.
"The problem is that if you regulate crypto enough to stamp out the blatant scams, fraud and self-dealing then it loses most of its appeal over other financial products."
I'm guessing you're pro-crypto, but this would be a better position for the opposition.
I was watching this thing on the YouTubes about carrier pigeons, they didn’t have to kill every single one of them to cause their extinction but just enough for them to be incapable of breeding.
if this is an individual than fine, but if it's a derivative wrapping up a bunch of opaque "assets", purchased by a fund that manages say retirement savings for mandatory investors like a pension, there is a huge risk. It's like if every teacher was required to finance a sub-prime mortgage.
They have risk management people though. If those people aren’t doing their jobs, the fund has bigger problems. There are much larger and less hypothetical issues with public pensions around risk.
I don't get why we haven't seen the SEC or the CFTC step to the plate with this. I'm already seeing a number of blockchain projects moving offshore, whether to the Cayman Islands or El Salvador, not because of favorable regulatory environments per say but just because the US is so opaque and murky with regards to this.
I think the US has somehow failed to protect investors AND managed to discourage companies from setting up there. It's the worst of all worlds. How much blame sits with the SEC for selective (and poor) enforcement and how much with Congress (for letting Gensler be so poor at his job) is an open question...
No, fuck all these takes. Every crypto bro has spent the past decade screaming about crypto being free of regulation and going to overturn the dollar as the most important currency and explicitly that regulation of money in the US is THE problem that caused 2008 and every sadness since the 70s.
You do NOT get to turn around now and get bailed out by my tax dollars. You got exactly what you wanted, and everyone told you this is exactly what would happen. Deal with the consequences of ignoring good advice.
Nobody in crypto was investing, they were gambling.
>You do NOT get to turn around now and get bailed out by my tax dollars.
Quite a useless generalization. Self custodied decentralized commodities like bitcoin and centralized corporate created/run crypto securities are vastly different as far as required government involvement is concerned.
The SEC should be more forthcoming in providing clarity to institutions creating securities and centralized services instead of playing a weird gotcha game while maintaining a high level of opaqueness.
Any business committing fraud, violating securities or custody laws in the US should get penalized and the clients have the right to claw back remaining funds regardless of their personal economic views.
If crypto was actually free of regulation that would be a perfectly acceptable tradeoff, but it clearly isn't. Sometimes projects get boned for no reason with no instructive guidelines, often to the point they even would have been better off just ignoring the feds.
The US Gov taking a hands off position — "none of this shit is real, do whatever you want but don't expect us to protect you" — would be an excellent and satisfactory outcome. In practice, they would probably feel compelled to step into extreme cases like FTX where laws were violated immaterial of the jurisdictional status of blockchain assets, which is a good thing.
A firm set of regulatory guidelines, which does not imply a bailout by any means, would also be a good outcome. The worst part of what we have now is that the legal status of this industry in the US is completely opaque, and the constantly changing uncertainty is driving investment in the technology overseas or stifling it all together.
The government is completely failing its mandate with this policy of inaction and indifference. Pick anything!
The point is that hand-wavey “market making” does not satisfy any need for a credible explanation. The “explanation” given by Li, to the CEO of the exchange is essentially, a complete lie. “Merit Peak” is not a vendor… it’s the CEO of Binance global.
If the CEO of Binance global is in control of an ostensibly independent third-party “market maker” and he is unilaterally making hundreds of millions of dollars of transfers into one of his exchange subsidiaries that is ostensibly independent, a transfer that even the exchange CEO doesn’t know about, it paints a very worrying picture.
Genuine market making has zero mystery, the CEO of a traditional finance exchange would know where funds are coming from and where they’re going to go. The fact that CZ is the only person who appears to know anything about these funds is a story, especially given the context — CZ should have nothing to do with Binance US market making!
The unilateral control of funds with zero accountability is what allowed SBF to engage in such widespread fraud, so it is fair to consider CZ’s behaviour in the same vein to be a story of note.
Your comment has the same issue as the article: lack of actual proof.
How do you know whether Merit Peak provides "Genuine market making" or "hand-wavey market making", and what other than people prejudices is the difference?
Also, the fact the CEO asked, and was told the reason for the payments is evidence she was fine with them. Not that no one told her. This confuses me about both your comment and the article. How do you get from her being told to her not knowing? She asked and was told. That's the same as every payment that has ever been queried by anyone right?
Also, Also, where does this "unilateral control" come from? There doesn't seem to be evidence the payment was not approved by Binance.US, including all the way up to the CEO level.
This article could be dismissed as "CEO doesn't know why payment is happening, is fine with it once she knows"
You're inventing a standard that doesn't exist, what is "actual proof"?
Starting from the beginning: Binance aren't allowed to operate in the US. So, an independent company was created, which Binance licensed their technology and brand to, and so that company now operates as Binance US. If all is above board, Binance US has autonomous leadership and CZ has zero involvement beyond collecting fees for licensing of the brand and technology.
> Binance.US's chief financial officer, Jasmine Lee, told the Wall Street Journal on Feb. 8 that "the extent of our relationship" with Binance.com is a shared name and a licensing agreement for technology. "We do not transfer our funds back and forth," Lee said.
The article we're discussing alleges that this "independent company" is not, in fact, independent, and evidences this by showing that decisions made about the operation of the company come from Binance.
The first example of this is that the CEO of Binance US is surprised to discover that a transfer of hundreds of millions of dollars is made into the platform, and so she asks for clarity from the finance team, who explain that the transfer came from a "vendor" that "facilitates trading" called "Merit Peak".
So, if all is above board: Binance US has received a transfer from a "vendor" to "facilitate trading" on the platform and the CEO wasn't aware of the specifics but that's fine because it's a vendor and they're doing market making which is a legitimate and valuable component of an exchange. Eventually, it's alleged, that an "unspecified amount" of the "vendor" transfer is sent on to "Key Vision Development".
The article then uses company records to show the following:
1. Merit Peak names CZ as a manager of the company
2. A Binance corporate filing identifies CZ as a director of Key Vision Development
3. The beneficial owner of Binance US is CZ
You're focused on the CEO querying the payment but that's not the crux of the matter. The payments that the CEO did not expect and did not have knowledge of came from... CZ.
The reason I describe it as unilateral control is because:
1. Binance US did not have access to their own banking infrastructure -- someone else controlled it
2. The CEO of Binance US did not know who was directing the financial activities of the company -- couldn't have been instructing
3. The financial activities of the company were coming from a company controlled by CZ -- controlled by Binance
If you choose to take the most charitable view possible of all of the information in the article, I guess you could argue that Binance US had no idea that Binance was using their platform... but even in that most charitable view, it's clear that Binance itself was funnelling money in and out of Binance US.
> Coley, who left Binance.US later in 2021, didn't respond to questions sent via her legal representatives. Li also didn't respond.
Last time I heard of Catherine Coley, she was nowhere to be found. I assumed her body will never be found as well. Did she appeared anywhere since April 2021?
I understand the downvotes for being the graphic nature of your post but I learned from your post that the former CEO of Binance US has been missing for almost a year. Holy cow that feels important, the article is outlining her questioning of these transfers and then she goes missing and they don't mention that?
She's only "missing" in the sense that she's not answering reporter questions or engaging on social media. It's relatively easy to see via related social media accounts that she's fine, not in hiding, not in witness protection, just offline.
I haven't really followed the story and it's crypto, so hard to find reliable sources. This site[1] reports:
> Responding to enquiries from this publication, the San Francisco Police Department revealed it has no file relating to the executive, who hasn’t used her social media accounts since abruptly leaving BinanceUS in May 2021.
> "We are unable to locate a police report related to the person to whom you referred," said Public Information Officer Robert Rueca.
In the future we'll interact with people online, who post pictures and videos of themselves to the internet, who will participate in Twitter spaces, who will video call you, but will never have existed in the first place.
It will be completely automated with no human doing anything. You will think they're human, because they act human. You will be in long distance relationships with them. At what point do we give them the same legal status?
> Binance executive, Susan Li, did not explain the transfers. Li wrote that Merit Peak was a "vendor that facilitated trading" on Binance.US and also provided loans and capital injections to the American exchange
The last part of that may be a smoking gun. The ending parts of OP hint at why.
51 comments
[ 3.1 ms ] story [ 102 ms ] threadCrypto is all super shady but that's how their advocates want it I guess?
[1] https://support.binance.us/hc/en-us/articles/360050532193
(Similar to vietnam as final assembly place for cellphones, to avoid made in china).
So its a party company, out there to keep a eye on the syphoning of funds out of china by the rich.
Former founder "vanished" like so many not party animals.
Otherwise, there is no justice system, so even a billionaire can vannish over night, making all the money in the world worthless. What good is it to be a party official, if you can not garantee that your children and spouse are in safety and better off at least.
[0]: https://2009-2017.state.gov/j/inl/rls/nrcrpt/2016/vol2/25342...
Binance is not crypto, it's a traditional centralized company. This goes for most other shady stuff in the space.
If the transfers came from Binance.US (BAM) and all client money is held by Prime, then it is very unlikely that the transfers were client money.
>"Where are those funds coming from?" she wrote in one message.
>In a response to Coley, seen by Reuters, the Binance executive, Susan Li, did not explain the transfers. Li wrote that Merit Peak was a "vendor that facilitated trading" on Binance.US and also provided loans and capital injections to the American exchange.
So Li DID explain the transfers?! It's not unusual for separate entities to market make, supply liquidity etc for exchanges, especially small, new exchanges like Binance.US in 2020/2021. And they get paid accordingly like any company rendering services.
This is a similar structure to how FTX and Alameda started off. But there is nothing dodgy about that structure per see. It is the same structure that Trad-Fi exchanges use. The issue is when (a) the market maker starts betting and losing money and (b) customer funds are used to bail it out. (a) is the problem and (b) is the criminal solution...
To be clear: I am not saying Binance is 110% above board, solvent, etc. Just that there is zero evidence otherwise here.
Traditional finance is heavily regulated, audited, and insured. We don't even know where Binance's HQ is or even where the CEO is hiding.
I hoped FTX would lead to basic common sense stuff but it hasn't...
I'm guessing you're pro-crypto, but this would be a better position for the opposition.
This threw me.
It seems to be self-regulating, people put money in and can’t get it back out so stop putting money in.
Until the next hype cycle when a new group learns the lesson of “there’s no such thing as a free lunch.”
Such as?
Yes and they already exist. They are the existing financial regulations for everything else. The only difference has been a lack of enforcement.
You do NOT get to turn around now and get bailed out by my tax dollars. You got exactly what you wanted, and everyone told you this is exactly what would happen. Deal with the consequences of ignoring good advice.
Nobody in crypto was investing, they were gambling.
>You do NOT get to turn around now and get bailed out by my tax dollars.
Quite a useless generalization. Self custodied decentralized commodities like bitcoin and centralized corporate created/run crypto securities are vastly different as far as required government involvement is concerned.
The SEC should be more forthcoming in providing clarity to institutions creating securities and centralized services instead of playing a weird gotcha game while maintaining a high level of opaqueness.
Any business committing fraud, violating securities or custody laws in the US should get penalized and the clients have the right to claw back remaining funds regardless of their personal economic views.
The US Gov taking a hands off position — "none of this shit is real, do whatever you want but don't expect us to protect you" — would be an excellent and satisfactory outcome. In practice, they would probably feel compelled to step into extreme cases like FTX where laws were violated immaterial of the jurisdictional status of blockchain assets, which is a good thing.
A firm set of regulatory guidelines, which does not imply a bailout by any means, would also be a good outcome. The worst part of what we have now is that the legal status of this industry in the US is completely opaque, and the constantly changing uncertainty is driving investment in the technology overseas or stifling it all together.
The government is completely failing its mandate with this policy of inaction and indifference. Pick anything!
If the CEO of Binance global is in control of an ostensibly independent third-party “market maker” and he is unilaterally making hundreds of millions of dollars of transfers into one of his exchange subsidiaries that is ostensibly independent, a transfer that even the exchange CEO doesn’t know about, it paints a very worrying picture.
Genuine market making has zero mystery, the CEO of a traditional finance exchange would know where funds are coming from and where they’re going to go. The fact that CZ is the only person who appears to know anything about these funds is a story, especially given the context — CZ should have nothing to do with Binance US market making!
The unilateral control of funds with zero accountability is what allowed SBF to engage in such widespread fraud, so it is fair to consider CZ’s behaviour in the same vein to be a story of note.
How do you know whether Merit Peak provides "Genuine market making" or "hand-wavey market making", and what other than people prejudices is the difference?
Also, the fact the CEO asked, and was told the reason for the payments is evidence she was fine with them. Not that no one told her. This confuses me about both your comment and the article. How do you get from her being told to her not knowing? She asked and was told. That's the same as every payment that has ever been queried by anyone right?
Also, Also, where does this "unilateral control" come from? There doesn't seem to be evidence the payment was not approved by Binance.US, including all the way up to the CEO level.
This article could be dismissed as "CEO doesn't know why payment is happening, is fine with it once she knows"
Starting from the beginning: Binance aren't allowed to operate in the US. So, an independent company was created, which Binance licensed their technology and brand to, and so that company now operates as Binance US. If all is above board, Binance US has autonomous leadership and CZ has zero involvement beyond collecting fees for licensing of the brand and technology.
> Binance.US's chief financial officer, Jasmine Lee, told the Wall Street Journal on Feb. 8 that "the extent of our relationship" with Binance.com is a shared name and a licensing agreement for technology. "We do not transfer our funds back and forth," Lee said.
The article we're discussing alleges that this "independent company" is not, in fact, independent, and evidences this by showing that decisions made about the operation of the company come from Binance.
The first example of this is that the CEO of Binance US is surprised to discover that a transfer of hundreds of millions of dollars is made into the platform, and so she asks for clarity from the finance team, who explain that the transfer came from a "vendor" that "facilitates trading" called "Merit Peak".
So, if all is above board: Binance US has received a transfer from a "vendor" to "facilitate trading" on the platform and the CEO wasn't aware of the specifics but that's fine because it's a vendor and they're doing market making which is a legitimate and valuable component of an exchange. Eventually, it's alleged, that an "unspecified amount" of the "vendor" transfer is sent on to "Key Vision Development".
The article then uses company records to show the following:
1. Merit Peak names CZ as a manager of the company
2. A Binance corporate filing identifies CZ as a director of Key Vision Development
3. The beneficial owner of Binance US is CZ
You're focused on the CEO querying the payment but that's not the crux of the matter. The payments that the CEO did not expect and did not have knowledge of came from... CZ.
The reason I describe it as unilateral control is because:
1. Binance US did not have access to their own banking infrastructure -- someone else controlled it
2. The CEO of Binance US did not know who was directing the financial activities of the company -- couldn't have been instructing
3. The financial activities of the company were coming from a company controlled by CZ -- controlled by Binance
If you choose to take the most charitable view possible of all of the information in the article, I guess you could argue that Binance US had no idea that Binance was using their platform... but even in that most charitable view, it's clear that Binance itself was funnelling money in and out of Binance US.
Last time I heard of Catherine Coley, she was nowhere to be found. I assumed her body will never be found as well. Did she appeared anywhere since April 2021?
> Responding to enquiries from this publication, the San Francisco Police Department revealed it has no file relating to the executive, who hasn’t used her social media accounts since abruptly leaving BinanceUS in May 2021.
> "We are unable to locate a police report related to the person to whom you referred," said Public Information Officer Robert Rueca.
[1] https://www.asiamarkets.com/the-curious-case-of-catherine-co...
The last part of that may be a smoking gun. The ending parts of OP hint at why.