So, anybody going to jail?
I thought not.
The world's largest cryptocurrency exchange just got a little smaller, with the US Department of Justice announcing Binance and its CEO Changpeng Zhao have both pleaded guilty to a multitude of financial crimes. As a result Binance will fork out $10 billion to Uncle Sam in fines and settlements. According to a criminal case [ …
Yeah, I'm sure I'm missing something here. So they knowingly broke multiple laws, have openly admitted to it and processed around $1B to people in sanctioned countries but no one is going to jail? Although no fraud is mentioned here, there is definitely something fishy about the conclusion of this. I mean, my understanding of the US is that if you make even a slight 'mistake' on your tax return the IRS get quite annoyed with you.
Did they really make that much as a middleman for crypto trading? Considering how thinly traded that is, that would be a massively higher profit margin than Wall Street firms make off consumer trades!
Or did they make their money off trading with customer funds like Sam Bankfraud, with the difference that their trades made money instead of losing money?
The press release states $1.35bil came from trading fees, which feels ballpark correct compared to Wall Street market makers and considering the fees/spreads are actually quite similar.
The rest sounds suspiciously like money in the process of being laundered (the phrase 'civil forfeiture' is used), which means it might be anything from proceeds of Iranian oil bypassing sanctions to money extorted by North Korean APTs, and in most of those scenarios we can expect them to be discrete about the details for legal and diplomatic reasons.
They've probably also benefited enormously just from having shareholder capital invested in crypto-currency.
Civil forfeiture in the US is a pretty grotesque thing, in my opinion. It allows law enforcement to nab assets on the suspicion that they're part of criminal activities with return to the original owner only taking place if legitimate origins can be proven.
In practice, this means that anyone with possessions that are a bit too nice or who have a bit too much cash for their perceived station in life are liable to lose it to police and rarely get it back.
Watch this channel:
In some states the money/assets taken can be kept by the police department. So absolutely no incentive to take as much as you can...
Even at a federal level. In 2021 (I think) the FBI raided a bank in LA and seized the contents of every safety deposit box. So far they've not been able to show that any criminal activity had taken place at the bank but have pretty much kept everything, which is estimated to be ~$100M in value.
The FBI has pretty much said if you can't prove that everything in the box belongs to you and that you were in possession of the items legally then you can't have them back. Judges have supported the FBI as well.
Wow! That is a pretty low value. You can understand why they get away with it as taking them to court will cost 10-100x that.
Some of the stories are just crazy. I can't believe that they are allowed to get away with it but qualified immunity and friendly (paid off?) judges are key aspects.
Since he lives in China extradition would have been difficult. That probably provides you more leverage to negotiate a plea deal since the alternative is an arrest warrant meaning his travel is restricted to countries that won't extradite and an open warrant that languishes for years.
Since the main reason people commit crimes like money laundering is to make themselves richer, forcing him / his company to disgorge such a large amount of money isn't nothing. Without his cooperation Binance would have been able to keep all the ill gotten gains. If they threw the book at him and were able to put him in prison, that money would have remained in the company so the shareholders in Binance would benefit. Most of them were probably unaware of what was going on, but some likely at least knew but couldn't be proven guilty in a court of law. This settlement makes them "pay" as well.
It's an imperfect world. The criminal justice system has always been set up more for dealing with petty crimes like "I broke into your house and stole $100 cash" than complex financial crimes that span the world and involve many players both those guilty of additional crimes to those charged and those unaware of what was happening but financially benefiting from the crimes.
....... to Emerge and Surge and Purge from Deep and Dark Shadows
Does that tale ...... "Binance and CEO admit financial crimes, billions coughed up to US govt .... Chief quits, pays own penalty after helping crooks launder cash, aiding sanctions evaders” ..... dispel the suspicion and confirm the fact that the United States of America is a failed pariah criminal state enterprise?
Or is such behaviour default normal for capitalism in a supposedly fair and popular vote winning, democratically elected executive office administration/governmental machine?
And more as a business expense, ~$10b is not a bad deal for what they've managed to build. They bypassed all that pesky regulation and legal rigamarole that slows down startups just because what they do is "illegal" and "a variety of crimes" and wraps it into a one time cost they got to pay after they managed to capture a significant part of the market.
This is the bold leadership and vision our future deserves.
Sorry, but how stupid can one be to write this in a chat:
""Better to ask forgiveness than permission."?
This is the attitude; move fast and break things - the consequences will rarely be applied to the perpetrators - which shows here again in that there is no jail time end the company is allowed to continue on with the same business model and habits.....