Read the court filing. There's a lot of inside information from "BAM CEO A" and "BAM CEO B". These were the first two CEOs of Binance.us. They came on board thinking they had a real job. Then they discovered they were just figureheads.
"BAM CEO A" was fired. "BAM CEO B" quit after three months and started cooperating with US regulators.
"Upon assuming his CEO duties, however, BAM CEO B quickly learned that
Binance, in fact, exerted and would not relinquish substantial control over BAM Trading and the
operation of the Binance.US Platform. As he testified under oath, BAM CEO B did not “have
any firsthand knowledge of exactly what [Binance] entity managed [Binance.US Platform’s]
servers,” but he knew it “wasn’t [BAM Trading].” Similarly, he also testified that the matching
engine was “presumably owned and administered by some [Binance] entity, but I have no idea
which one, and then there’s other servers doing other functions.” He concluded, the “biggest risk
in this company is we are highly dependent on a bunch of technology that sits in Asia.”
"BAM CEO B tried to implement plans to migrate those functions and control of
the crypto assets from Binance to BAM Trading and into the United States, but Zhao quickly
overruled him, causing BAM CEO B to resign approximately three months into his tenure."
"As BAM CEO B testified, “[W]hat became clear to me at a certain point was CZ
was the CEO of BAM Trading, not me.” He further explained that he spent his first 80 days as
CEO trying “to get these core foundational things realigned,” but “was overruled on all of them”
by Zhao. BAM CEO B elaborated, “All of the things that we had previously agreed and had
worked on for 80 days were suddenly repudiated with no further discussion, and on that day, I
realized, huh, I’m not actually the one running this company, and the mission that I believe I
signed up for isn’t the mission. And as soon as I realized that, I left.”"
Former Comptroller of the Currency (and former Chief Legal Officer at Coinbase) Brian Brooks served as CEO of Binance.US for only 3 months in 2021. He makes a very credible witness!
Any sane person who realizes that their job is to be thrown under the bus has two options: Either go along with it and be a conspirator, secure your means of getting away, or start talking to the law enforcement to cover your ass.
The people running Binance should have realized that the first option did not happen and they should have prepared for the second option. Although it is good that this didn’t happen, SEC now has an easier case because of this.
I suspect it's very hard for people to realize that. Thinking back on my career, there were jobs I stayed at too long because I was hoping things would turn around, that I could make more of a difference than I ultimately did.
That was hard enough for me to realize as a low-level worker. It has to be a fair bit harder if you've got a fancy title and a fancy salary. "It is difficult to get a man to understand something when his salary depends on his not understanding it."
True, but I think that hurts them here. Corporate politics is about fitting into a status hierarchy and working your way up it. You exchange your own identity and concerns for that of the organization, and are rewarded with status and money.
A fake CEO like Zhao appeared to want here would be doing exactly the same thing he's been doing on the way up: rolling over for whatever the more powerful person wants. It's just that the stakes have quietly changed, with a sudden downside of "5-10 in a federal prison". As people like Caroline Ellison have recently realized.
Not in the way he would have liked. He leaked information on compromised Chinese systems to China, hoping to gain asylum in the then relatively free Hong Kong, but China told him to take a hike. He then got on a Russian airline to try to get to Ecuador, but Russia detained him on pretense of invalid travel documents, which China didn't care a whit about. "Lucky" for Snowden that he didn't reach Ecuador, as Moreno would have given him up like he did Assange.
Why would they? Have Coinbase done anything similar to what Binance is being sued by the SEC for? You could check the court filing and let us know.
And don't stop there. If you've found wrongdoing at Coinbase the SEC would be interested in, feel free to submit a tip to the SEC (https://www.sec.gov/whistleblower/submit-a-tip). Many people have made millions off these tips. This could be your time to shine.
On a separate note, if I wanna file a compliant against a couple other fintechs regarding serious violations, how would I be rewarded? Do you have more clarity? Would appreciate some help!
This article by the Economist talks about the SEC whistleblower program and how to take advantage of it - https://archive.is/vwYXu. They mention that one of the tips was entirely based on open source information. As for reporting, you could leave a tip on the page but they get thousands of those. If you're absolutely certain about your tip, you might consider retaining legal counsel.
> 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.”
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 secure, but not at all robust to much simpler betrayals, hacks, etc. If you trust overmuch in the tech and don't focus on less technically interesting but more fundamental threats, you're apt to get rekt.
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.
Not writing down anything youd be upset another person read is a pretty standard instruction for people doing interactions with ordinary business clients anywhere that data protection legislation theoretically allows them to make a statutory request the company send records you hold about them (Probably other jurisdictions too, if their lawsuits have a discovery process)
And that's "dear junior sales team members, please don't put your opinion of the client in writing, in the unlikely event they ask for a data dump they might be a bit miffed", not "dear compliance chief, please don't write confessions to breaking laws our lawyers might be able to argue we attempted to comply with when we inevitably have to defend ourselves in court..."
> that's "dear junior sales team members, please don't put your opinion of the client in writing, in the unlikely event they ask for a data dump they might be a bit miffed"
One of my first moves running a trading team is reducing or eliminating internal chat. I don’t think I’ve gone a week without at least one client receiving an inappropriate nickname. It’s harmless. But it’s not something you want showing up in discovery or a regulatory inquiry.
I was _shocked_ when I moved from finance to tech and chat retentions (if they weren’t infinite) were set in months.
I was used to low single digit days retention. I still think that’s a good policy even without compliance issues. Keeping chat from becoming a de facto document management system.
> 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"
> And this was for an org that was doing nothing sneaky or underhanded in the slightest
I disagree. That culture is one of routinely doing sneaky and underhanded things.
If it wasn’t, the rule would be “don’t do anything you wouldn't be happy to be see published on the front page of the Washington Post.”
(Outside of things that are legally cobfidential, but those are generally protected from FOIA even if in writing.)
If you are actively preventing evidence of your actions from being created, that is itself evidence of consciousness of wrongdoing.
Plenty of examples of companies that did nothing wrong, but some written comment, by some employee is enough to convince a jury that "something probably happened".
I remember one pharmaceutical company was on trial for a drug that was suspected to have a bad side effect (later analysis show it didn't). They had done nothing wrong, all data was provided to the FDA, they diligently collected post-marking data, shared with the FDA, etc.
A civil suit was brought and during discovery they found a comment that said "maybe our dose was too high?". The person who made the comment had nothing to do with the trials, didn't have the skills to interpret the data, didn't even have a medical background.
Once that was found? Boom, the company settled because that was enough to convince a jury that "they probably knew it was wrong".
It's very easy to put something in writing now that has no impact, but in a few years time is a smoking gun. It doesn't matter if you testify that around the circumstances when you wrote it ("oh, I didn't mean that"), the jury won't believe you, the prosecution will just flash that one sentence up and say "see, it obvious the company was hiding the problem".
There are plenty of cases where you wouldn't want something perfectly reasonable to be published in the Post. The key is context - some things are complicated and require background and relevant information; if taken without that context, they'll seem bad.
Seeing as we live in a world in which people in the other political party are highly motivated to take whatever they can of their opponents (and their opponents' appointees, etc.) and make them sound bad, it's understandable that folks would be cautious of what they write down. If someone emails you a question whose answer is potentially politically sensitive, you might not want to provide a brief answer to that email that you know could be misconstrued. That isn't "evidence of consciousness of wrongdoing" - it's just understanding the reality of politics.
> There are plenty of cases where you wouldn't want something perfectly reasonable to be published in the Post. The key is context - some things are complicated and require background and relevant information; if taken without that context, they'll seem bad.
I agree with GP. It is a shadowy culture. The Washington Post bit is the clue when you walk in. You are working for the United States government. It is not the Washington Post you should care about, it is the Justice Department and the legal system.
If you say that politics trumps laws then you are implying extra-legal forces dominate legal forces in our system. One way such hidden power centers are created is via shadowy bureaucracies. For example, FBI should write down everything they discuss and decide. We should be able to shine a light into any government institution in our land. If everything is legally done, there is nothing to be worried about, Washington Post be damned.
Hard disagree- the appearance of wrongdoing can be nearly as harmful for the accused and cause as much trouble as actual wrongdoing. Both should be avoided.
Another Hard Disagree. I put everything thing in writing. If it’s not written down it didn’t happen.
Want access to prod? Sure give me a ticket. I don’t trust any place that doesn’t want things written down.
And the example of a drug trial comment being taken out of context? If it looks bad in a few years maybe it should also look bad now? And maybe steps should be taken to make it better now.
Writing things down, keeping copies of emails is the only way to hold management accountable.
In my country, there were some major anti-government protests a few years ago that pro-government media claimed were paid for by Sorosz and other such figures. My colleagues and I attended these protests and often talked about them. We also often joked about these claims by asking each other if the checks had arrived, how much they had made last night etc.
Of course, if our internal chats were subject to [the local equivalent of] FOIA requests, this would have been incredibly risky, since without the context of how much we laughed about them, the texts themselves would have looked like smoking guns. Government media would have had a field day.
This is the benign sort of thing you want to avoid putting in writing if your writing can be audited by motivated outside parties.
This is basically the “if you have nothing to hide, what’s the problem if the police can read all your correspondence?” argument applied to an organization.
Sure, if you view government agencies as equivalent to individual citizens and the public as equivalent to the police.
But some people view that the government is properly subordinate to the citizenry and not vice versa, such that inverting the government and public roles materially changes the scenario.
I think that no matter how scrupulous any government organization is, there are many motivated actors who would, given an unfiltered record of everyone single person's correspondence and conversations, be able to spin a misleading negative story out of it. This is essentially some people's full-time job and they're good at it.
> If you are actively preventing evidence of your actions from being created, that is itself evidence of consciousness of wrongdoing.
Government people are humans too, not just nameless bureaucrats. Imagine working somewhere that you would never be able to make a joke, speculate on a topic, ask a question, because it could be taken out of context due to everything being documented/written down.
It is fine to desire that, but realize that there needs to be a significant pay increase and/or a significant realignment of expectations, since nobody would want to independently take responsibility or action on anything. I have worked in a culture like that and let me tell you, it was extremely difficult to have every move under a microscope 24/7 and I would never do it again.
Yeah, I’ve worked in government for more than twenty years.
> Imagine working somewhere that you would never be able to make a joke, speculate on a topic, ask a question, because it could be taken out of context due to everything being documented/written down.
Everything being written down makes things being taken out of contexr less of a risk. People with the attitude “don’t write things down if you don’t want to see it in the Washington Post” are, in my experience, without exception concerned primarily about things that would be problematic taken in context.
> It is fine to desire that, but realize that there needs to be a significant pay increase and/or a significant realignment of expectations, since nobody would want to independently take responsibility or action on anything
The attitude at issue is one of avoiding, not taking responsibility. People with it are the people who refuse to take responsibility even if they enjoy exercising authority.
But, yes, you need to pay people in government significantly more, no argument there.
Seems like naive reasoning in a world where such messages can easily be taken out of context. Imagine a lawsuit about a car malfunction leading to death and someone digs up some source code with a kill_child_process method. What does it matter whether that was relevant at all to the case at hand? It looks bad anyway. Anyway, such policies are similarly common in the corporate world.
> I'm still surprised when I see coworkers say things in slack
I was recently talking with a friend who recently left government. They mentioned that they has a special slack emoji, "JK FOIA", so they could clearly mark things as "just kidding" to future FOIA readers.
Right but in court the failure to keep adequate records may mean that the judge may rule that the absence of records is evidence of guilt. I think Google is facing this issue specifically.
The government has done a pretty good job of making the process very easy: https://www.foia.gov/
But, just like with ChatGPT, you'll likely have to do a bit of "prompt engineering" to get a specific document. "Give me all the stuff you guys got on UFOS1!!" will likely be less fruitful then "I am requesting the email correspondence between X and Y related to the documented observation of an atmospheric event occurring on ..."
In my experience these requests are taken quite seriously.
>For a typical requester the agency can charge for the time it takes to search for records and for duplication of those records. There is usually no charge for the first two hours of search time or for the first 100 pages of duplication.
>You may always include in your request letter a specific statement limiting the amount that you are willing to pay in fees. If an agency estimates that the total fees for processing your request will exceed $25, it will notify you in writing of the estimate and offer you an opportunity to narrow your request in order to reduce the fees. If you agree to pay fees for a records search, you may be required to pay such fees even if the search does not locate any releasable records.
The cost of the request is often based on how many man hours it will take to fulfill. Different agencies have different rates / different capabilities for performing the document search itself. Some agencies may also reflexively deny requests, which would require a lawyer to sue them to get resolution if you believe the denial doesn't legitimately meet legal exception requirements.
> Can I ask for any communications that are related to a decision made or drafting of something that goes into the CFR?
The broader the request, the more expensive it is and the lower the likely signal-to-noise ratio of the response is.
Also, on your specific example, there is a broad exemption to FOIA for internal deliberative process-related opinions, conclusions, and recommendations, etc.
There's about 9 exemptions that can be used to exclude information from a FOIA request ( https://www.faa.gov/foia/media/exemptions.pdf ). Primarily things regarding law enforcement, national security and privacy although there is one for wells and geological info.
The main purpose of not to put things in writing and instead to discuss face to face has always been not to create incriminating evidence rather than avoiding and "unsecured channel".
When you're using Signal or WhatsApp or whatever you're still putting things in writing to someone else and the risk, as we see again and again, is that this is leaked by the receipient(s). Plus ça change...
This is almost the raison-d'être of posh private members clubs.
I think "defector" is the wrong terminology here, since it's likely that most - if not all - the US based execs who weren't charged handed over these chats to the SEC.
It is noteworthy how often this happens. Many of the people found guilty of sedition after the DC riot had the same thing happen when the majority (or a large minority) of people in their encrypted chat groups handed over them over to the FBI.
Is there an E2E encrypted chat app that does disappearing messages and doesn't cache them on the client?
>The technology is cryptographically secure, but not at all robust to much simpler betrayals, hacks, etc. If you trust overmuch in the tech and don't focus on less technically interesting but more fundamental threats, you're apt to get rekt.
Isn't this the case with anything to do with cryptography, encryption, and digital security overall?
Because let's face it: Who seriously cares if your password is cryptographically hashed with 40960-bit SHA-9001 encryption transmitted over TLS8.11 For Workgroups?
Just call up the call center and convince the scriptmonkey you really are John Dickus the Fifth and get them to reset the password for you. Easy. Done. No quantum computer required to crack the code.
> "a fine metaphor for what ails crypto as a whole. The technology is cryptographically secure, but not at all robust to much simpler betrayals, hacks, etc."
I think you mean "crypto exchanges". Cryptocurrency itself is not subject to betrayals/hacks, for the most part (depending on how dumb you are at key management). And depending on how badly you selected your cryptocurrency (pro tip: just pick Bitcoin).
Bitcoin is actually a perfect example, since it's impossible to do anything with it except moving it from one account to another without requiring trust of the other party.
Normally, the main point of money is to exchange it for goods. But you can't securely and trustlessly exchange bitcoin for goods, since goods are not on-chain. So all the fancy cryptography is not solving the main problem that it would have been useful to solve.
I believe the parent was elaborating on their point here:
> it's impossible to do anything with it except moving it from one account to another without requiring trust of the other party.
Goods may need to be shipped, they could be counterfeit, etc. Bitcoin provides no facility for escrow or refunds - just moving tokens from one wallet to another. So you need to trust your counter party even more than you would with e.g. a credit card in order to transact.
> What's funny about this is it's a fine metaphor for what ails crypto as a whole. The technology is cryptographically secure, but not at all robust to much simpler betrayals, hacks, etc. If you trust overmuch in the tech and don't focus on less technically interesting but more fundamental threats, you're apt to get rekt.
That applies to all things within technology, OPSEC/INFOSEC is the very study of how to mitigate those very leaky channels, which are impossible tasks to accomplish entirely because of Human nature. I recall a post here some time ago that says that most non-leak related hacks are mainly due to social engineering, as that is the most viable way to take down an asset/target.
Honestly, CZ will likely brush this off; the US is being incredibly hostile to all things that threaten the USD; it make sense, and those that thought the USD and BTC could co-exist in the US were disillusion because of things like this.
Even that scrub Armstrong is starting to see why his pursuits to cozy up to the VC crowds and US regulators only prolonged the inevitable wherein this will return to a regulatory nightmare that favours other nations; mainland China under the CCP will continue to ban it (for nth time) in order to stifle the immense amount of capital flight out of China but it will remain legal in Hong Kong with favourable and relaxed regulations. Once again favouring the afflurent and political;ly connected who can incorporate in an absurdly HCL safe-haven like HK
and excluding the poors from utilizing financial services that could help them from the exposure to the collapsing banking sector.
And thus proving again that unless its a situation like El Salvador where it becomes a national currency there is nothing to indicate that politicians have the will or ability to actually put clear regulation in place for Capital and innovation to progress in Fintech.
Which would be obvious if you have any semblance of why Cypherpunks and renowned economist like Hayek considered a free-floating, non-state issued currency the most critical thing for a free Society.
National Fiat currencies have a limited life-span, typically 35-40 years, and this always leads to economic turmoil and inevitably war; which always favours nations who can impose their neo-bondage via entities like the IMF and World Bank when the dust settles and then gain access to cheap resources, and Human capital.
Anyhow, I'm not surprised this happened, but it's a nothing-burger that will be good for those DCA there way back into this market (myself included).
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 describing the issue so that later on you aren't held responsible for it (of course depending on the severity quitting may also be desirable, but not everyone is in a position to immediately drop a job).
If you're covering your ass, you write something with cautious "could be interpreted as..." wording that distances yourself from it, not "we're doing a fking crime bro!"
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?
No, the criminals are extremely smart. Its just that these were amateurs who didnt know that in Anglosaxon common law, you have to avoid being honest about anything and even deny any wrongdoing even if you get caught the act of murdering someone. Then you can exercise plausible deniability, claim incompetence or mental incapacity and you can negotiate your sentence. Any kind of honesty works against you in the US law as a result. That's how you end up with people who are total experts in their field testifying in courts that they "didnt know" that something they did would cause so much harm to something or somebody or the society.
As of this very moment, thousands of much, much bigger corporations are actually destroying the entire US society in a real way and not like these amateurs who were just shuffling some funny money. But the real psychos know how common law works. There wont be any trail of their wrongdoing, and when there is, there will always be plausible deniability in that trail...
> these were amateurs who didnt know that in Anglosaxon common law, you have to avoid being honest about anything and even deny any wrongdoing even if you get caught the act of murdering someone
Ignoring the "Anglosaxon" buzzword here, none of this is unique conceptually to US law, or foreign conceptually to anyone who's told a lie when younger. It's instinctual for many when they know they've done something wrong. Trying to paint human nature as a unique problem that US law faces, or promotes, is itself dishonest.
> claim incompetence or mental incapacity
Neither of these get you "off the hook"; that's a misconception.
> That's how you end up with people who are total experts in their field testifying in courts that they "didnt know" that something they did would cause so much harm to something or somebody or the society.
It can be either dishonesty, or lack of omniscience by the expert in question. Unless you're a mind reader, you have no idea. This is why testimony is evaluated along with other aspects of a case, and not alone.
> There wont be any trail of their wrongdoing, and when there is, there will always be plausible deniability in that trail...
Plausible deniability does not shield you from all liability.
The 'Anglosaxon' term is a long-standing political science, history and diplomacy term. Its not something that can be ignored, especially because...
> none of this is unique conceptually to US law
... it is.
The common law derives from the medieval !Anglosaxon! feudal law, which is based on contracts, agreements, negotiations and precedents. It can be 'interpreted' by the judge, who takes on the role of the feudal lord of the earlier times, and he or she can 'interpret' the law or precedents. The persecution or the defendant can negotiate any outcome. This trait of the common law system causes all the parties to open the 'bargain' from the maximum bets that they can imagine, assuming that it will be 'negotiated down' eventually. Which obligates the need for lying and denying that was mentioned earlier - if you deny any kind of wrongdoing even when caught red handed, you have a better chance of negotiating something better than if you were honest. The only sizable countries that use this law system are the UK, the US, Canada, Australia, and NZ if you count as sizable. Along with a number of smaller island states.
The ENTIRE rest of the world uses the civil law system that descended from the Napoleonic law, which descended in turn from the French Revolutionary principles. It does not rely on agreements, contracts, negotiations or precedents. It cannot be 'interpreted' The law is made by the democratic parliamentary authority and it clearly outlines crimes and punishments and there can be no negotiation made. Even the reductions in sentencing or the modifications that can be done to the final decision on anything are clearly outlined. Including the benefits that confessing a crime brings. Whereas lying is penalized further. There is no 'negotiation' that can be done in any way. That is why civil law encourages confessions and telling the truth in contrast to the common law which allows you to negotiate.
Which is also the reason why the lawyers get upper middle class salaries and income in entire rest of the world but make obscene, irrational income in the US - when the legal system allows outrageous decisions, reparations, sentences that can only be negotiated through professional lying, posturing, playing down or up, personal relations in between the lawyers, prosecutors and judges, it encourages the mess that one can see in the US to happen.
In Europe, judges and lawyers and prosecutors function more like clerks - the law is clear and solid. The rewards and punishments are the same. Has someone done what he or she shouldnt have done? Yes. What is the penalty for this? This particular thing. That is applied. There is no 'negotiation' anywhere in the process.
This difference not only makes the Anglosaxon legal system quite different from entire rest of the world, but it also causes the social, economic and political life in the Angloamerican world and the rest of the world to be very different. A corporation can get away with destroying the environment or killing hundreds of thousands people with their product or the new drug. Even if they know beforehand what will happen and start to repress information and bribe experts to lie on their behalf to sell their product. Because, when they get caught, what will happen will be an eventual negotiation. In the rest of the world that does not happen - there is no way to negotiate down any sentence that may befall on your corporation, but most importantly, you, the perpetrator...
>It can be 'interpreted' by the judge, who takes on the role of the feudal lord of the earlier times
The judge is separate from the prosecution (who are referred to in court as "the state" or "the government"). This is called "judicial independence".
>The persecution or the defendant can negotiate any outcome...
...provided that outcome is preferable to having the jury decide.
>Which obligates the need for lying
No, that's perjury if done under oath. Or, in the case of prosecutorial misconduct, grounds for a mistrial.
>The ENTIRE rest of the world uses the civil law system
No, it does not.
>which descended in turn from the French Revolutionary principles.
No, it's even older than that.
>It cannot be 'interpreted'
You have never been sued in France, and you have never seen the inside of a US courtroom except on TV.
>Which is also the reason why the lawyers get upper middle class salaries and income in entire rest of the world but make obscene, irrational income in the US
The average US lawyer makes less money than the average web developer in the Bay Area.
>In Europe, judges and lawyers and prosecutors function more like clerks - the law is clear and solid.
Europe, equipped with legal technology far in advance of what the Anglophone world must deal with, has eliminated ambiguity in language to such an extent that the legal profession there is now a form of bookkeeping. Soon, the Sorbonne law faculty will be replaced by Droite-GPT (which will still take the month of August off, because reasons...)
>In the rest of the world that does not happen - there is no way to negotiate down any sentence that may befall on your corporation, but most importantly, you, the perpetrator...
The Code Napoleon has eliminated corporate malfeasance in the non-english-speaking world. Quite remarkable.
> The 'Anglosaxon' term is a long-standing political science, history and diplomacy term. Its not something that can be ignored, especially because...
Well, being perhaps overly pedantic, but it should be written Anglo-Saxon, and there's a reason that it's hyphenated.
> The common law derives from the medieval !Anglosaxon! feudal law [...]
I have literally heard no one refer to it as "Anglo-Saxon" law before--it's "common law" or sometimes a formulation like "in the Anglosphere" or "English-derived law." Calling it Anglo-Saxon, in fact, would be wrong, because it's not Anglo-Saxon--it's Norman. (And, we're getting incredibly pedantic here, Anglo-Saxon rule was never feudal.) Even Wikipedia's page listing other terms for common law never suggests Anglo-Saxon, the closest being Anglo-American.
> The ENTIRE rest of the world uses the civil law system that descended from the Napoleonic law,
LOLNOPE. Actually, I think a majority of the world population might not even be on the civil law system (whether derived from Napoleonic code or not). There's a lot of Islamic law and customary law going on in several countries, especially several populous ones. Not to mention that many civil law countries never incorporated the Napoleonic code or any of its descendants.
> The persecution or the defendant can negotiate any outcome. This trait of the common law system causes all the parties to open the 'bargain' from the maximum bets that they can imagine, assuming that it will be 'negotiated down' eventually. Which obligates the need for lying and denying that was mentioned earlier - if you deny any kind of wrongdoing even when caught red handed, you have a better chance of negotiating something better than if you were honest.
Uh... I mean, by this point, it's pretty clear to me that you have at best a superficial understanding of how common law legal systems work, because this is confusing as heck, and it's muddled to the point that I'm not sure what you're trying to argue.
I think you're starting by talking about plea bargains, which is a concept that only exists for criminal prosecutions, and a quick perusal of Wikipedia suggests that some civil law countries do have facilities that are similar to plea bargains. But we're not talking about criminal prosecutions here, we're talking about civil disputes, and both civil and common law jurisdictions allow parties to settle out of court to resolve a dispute.
Long standing in what circles? I've only seen it in Russian derived or connected media, political think, and institutions. The primary source of papers using that term to refer to US law seems to be the Russian State University of Justice.
I don't think I've seen an authoritative source elsewhere use it, because it would be like pretending the Norman conquest never had an effect on legal proceedings. As if there is some unbroken historical lineage.
This is why I labeled it a buzz word, it's a phrase with a specific (negative) connotation attached to it, used by specific media, as a catch-all for describing institutions in the US.
Long standing in history, long standing in diplomacy, long standing in actual freaking Louis XIV administration communique, long standing in practically everything.
No offense but just because you people have a beef with Russia at the moment and they are using the term, the rest of the world is not going to change how they speak so that you dont get offended.
> I don't think I've seen an authoritative source elsewhere use it
> Long standing in history, long standing in diplomacy, long standing in actual freaking Louis XIV administration communique, long standing in practically everything.
That's neat, the dead are welcome to their opinions. That doesn't change where or why it's used primarily by certain parties in their English facing media.
> No offense but just because you people have a beef with Russia at the moment and they are using the term, the rest of the world is not going to change how they speak so that you dont get offended.
I never asked them to-- if that's the phrasing in their native language, then so be it. Same reason why we can call Germany the name "Germany".
But it clearly has a different meaning in English.
> Obviously you are not a student of history.
I'll admit error if you can find a source, that's not Russian, that uses it to refer to modern US law-- even if it's just a translation from another language.
The problem is I'm having a hard time finding one on my own.
> That's neat, the dead are welcome to their opinions. That doesn't change where or why it's used primarily by certain parties in their English facing media.
How does this justify removing an actual historic term from the vocabulary.
> But it clearly has a different meaning in English.
It doesnt:
> I'll admit error if you can find a source, that's not Russian
It amazes me how someone that claims any insight in the matters of law can ask for 'sources' for such a thing. It just feels crazy. Here you go:
Its not about the law, its not about the history, its the actual term used in an Anglosaxon source about how French saw the !rise of Anglosaxons! in 20th century.
This paper of the actual university of Cambridge is actually named "The Rise of the Anglo-Saxon: French Perceptions of the Anglo-American World in the Long Twentieth Century". It is the Anglosaxons using the actual scientific term to refer to the actual historic and political science concept.
> The problem is I'm having a hard time finding one on my own.
Thats amazing now. The above was the first google result for me, an avid student of history. You were unable to find anything maybe its because you dont have much interest in that direction. Or, more likely, you were totally inundated with the actual propaganda war that very Anglosaxon establishment is waging against the actual historic term just because its current enemy used it to describe, well, itself...
An entire article describing the: absence of its usage in scholarly contexts outside of specific cultural domains, and also simultaneously points out its usage as a ideological label.
I'll admit my error in being unable to find this, but it's not legal analysis specific, and the paper probably isn't what you were hoping for.
The problem with writing that your company is knowingly committing a crime in an instant message to colleagues has little do with "negotiation" and everything to do with evidence, which funnily enough is taken into account in most legal systems influenced by Napoleonic codes...
It may surprised you to learn that criminals also commit crimes and lie about them in countries whose legal system is not based on common law.
> civil law system ... does not rely on agreements, contracts, negotiations or precedents. It cannot be 'interpreted'
betrays that they've never examined legal proceedings in either system.
Contracts apparently don't exist in civil law, and when asked to explain the differences between "Jurisprudence Constante" and "Stare Decisis", I guess "Jurisprudence Constante" means precedent doesn't exist!
I think they're confused on the differing weight and roles of case law in rendering decisions between the two systems, and over corrected.
This does sound like insincere debate. Where does in my comments it says that contracts dont exist in civil law. It says civil law is not BASED on contracts, agreeements and precedents. The common law is.
And no, the complications that are so beautifully and 'respectably' named in the common law dont exist in civil law. The law is always clear - if something is not covered by an immediate law, it is covered by a broader law that affects those cases.
> The common law derives from the medieval !Anglosaxon! feudal law, which is based on contracts, agreements, negotiations and precedents
This is the !very first! statement of the opening paragraph of my comment. Why are you saying that I have not said it. Have you not read the actual comment?
> Why would they exist conceptually if they're not relied upon?
Why would they be relied upon if they exist, even further, why would they be the basis of the actual law?
In civil law, the law always supersedes anything else, including any agreement that any party makes among themselves. The agreements, contracts that parties makes in between themselves cannot affect the law and its decrees in any way, and actually any contract itself must be made precisely as how the law outlines them to be made and what permits them to have. To put it in historic terms, in civil law contracts exist because the law says they can exist and tells precisely how will they exist and to what extent, whereas in common law the contractual agreements that the parties made among themselves all the way going back to Magna Carta are the basis of the entire body of law - with Magna Carta being a contractual agreement in itself.
I will respond to that comment here because HN rate limits me, making any productive discussion totally infeasible, which is why I almost totally stopped participating on this platform. Seeing how it makes actual discussions impossible, I should altogether stop participating here. But here goes the reply:
> the paper probably isn't what you were hoping for.
The term exists, its an important term in history, political science, diplomacy for a very long while, the very Cambridge university uses it itself. At this point you should be aware that even you would be able to find many references using the term. So dont sweat it. The rest of the world is not going to stop using it just because you people have a beef with some country that uses it.
...
At this point, seeing that you have claimed that I said various things I have not said and also claimed that I didnt say things that are the very first things that I said, I have no other option but to conclude that you are an insincere debater. Which concludes our discussion since I will spare both of us of a potential unproductive discussion by disengaging...
> This is the !very first! statement of the opening paragraph of my comment. Why are you saying that I have not said it. Have you not read the actual comment?
> Why would they be relied upon if they exist, even further, why would they be the basis of the actual law?
I said you didn't use it in the statement describing civil law.
I didn't bother tackling "common law is based ..." because frankly if I tackled every inaccuracy in your statements, I'd be here all day.
You were opining on the merits of civil law, by describing an "ideal" model of system which doesn't exist in any of the countries you've mentioned.
You attempted to exclude principles, which even if they don't exist in the same form, that are still present in those other country's judicial apparatus-- just with different weights and state supervisory organs.
> I will respond to that comment here because HN rate limits me, making any productive discussion totally infeasible, which is why I almost totally stopped participating on this platform. Seeing how it makes actual discussions impossible, I should altogether stop participating here. But here goes the reply:
The site is actually having problems at the moment for many, including me, you're likely not being targeted specifically-- unless you're getting an explicit error indicating so.
> The term exists, its an important term in history, political science, diplomacy for a very long while, the very Cambridge university uses it itself. At this point you should be aware that even you would be able to find many references using the term. So dont sweat it. The rest of the world is not going to stop using it just because you people have a beef with some country that uses it.
They used it to describe how it goes un-used, outside of France in this specific instance, don't misrepresent the article.
> At this point, seeing that you have claimed that I said various things I have not said and also claimed that I didnt say things that are the very first things that I said, I have no other option but to conclude that you are an insincere debater. Which concludes our discussion since I will spare both of us of a potential unproductive discussion by disengaging...
Where? Don't blame me for your inability to articulate.
Nowhere in my comment it says that criminals in other countries do not lie. Or the admission of guild is not considered evidence. It clearly outlines the differences in the legal systems and how the competent criminals navigate the former. If Binance people had any experience, they would be talking by using well rounded and vague words even among each other like how any exec in the US does, and they would avoid providing any such evidence. Moreover, they would easily be able to claim ignorance and deny any wrongdoing.
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.
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 reasonable.
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 the investment.
Any profit comes from the efforts of a promoter or third party.
If the answer to all these questions is "yes," the transaction is likely an investment contract and, therefore, a security. However, please note that this is a simplified explanation. The actual determination can be complex and might require a detailed analysis by legal professionals.
"""
To me it DEFINITELY sounds like crypto is a security, but it seems like it mostly hinges on whether people expect to make a profit by investing. Which some people do and some people don't. But most people do right?
If you're really, really motivated, you can make facially-plausible arguments against any of the four factors. (Coinbase does this, for example).
Common enterprise and expectation of profit are the two factors that are the weakest, and for a pure cryptocurrency like Bitcoin or Ethereum, there's probably not enough to meet common enterprise there. Although by the time you get to staking--especially an exchange offering to stake on your behalf--you'd probably pass the threshold of common enterprise, and you should assume your service meets the Howey test.
Importantly, you don't have to convince yourself that you don't meet the Howey test. At the end of the day, if it comes to it, you have to convince a judge while they are being also courted by an adversarial party.
It doesn't matter what your company's interpretation is if a judge says "nah dog that isn't right".
What matters is whether you genuinely believe your interpretation is reasonable
I don't think any of these crypto companies have ever believed they could convince a judge, hence all the hemming and hawing in the public sphere in an attempt to build pressure against the SEC to either give them an out by making a very specific statement that they can work around, or by getting an administration to push the SEC to ignore all the bad stuff in crypto land.
Interesting. I'd answer those questions as "Yes. No. Maybe. No." So definitely not a security.
1. Is cryptocurrency an investment of money? Obviously yes, at least in the sense you have to spend money to purchase or mine it.
2. Is cryptocurrency investment in a common enterprise? No. What enterprise? Common with who? Maybe if it's a token issued by a company or something and tied to their profits somehow, but that doesn't apply to any of the common cryptocurrencies like Bitcoin, Etherium, Monero, etc.
3. Is there an expectation of profits? This depends on entirely on the person buying the token and what they intend to use it for.
4. Does any profit come from the efforts of a promoter or third party? No. What promoter? What third party? If the value fluctuates you can make a profit, but there's no third party involved exerting "effort" that's involved in that process.
If you want to argue with me on 2 and 4, explain how cryptocurrency meets those criteria but not, say, gold.
2: The more people buy and hold Bitcoin, the more valuable it becomes.
I asked ChatGPT about the definition of common enterprise:
The 7th and 2nd Circuits use a "horizontal commonality" test, where a common enterprise is found if the profits of the investors are interdependent - i.e., if the success of the enterprise is tied to the success of other investors. Essentially, the investors' funds are pooled and they share in the profits and losses.
3: Overwhelming majority of people who buy gold buy it as a hedge against inflation. In the past 5 years everyone I personally know who has bought cryptocurrency was expecting it to increase massively in value (expecting profit).
4: There have been a huge amount of cryptocurrency pump and dump stories where the promoters have benefitted immensely. In those cases it seems pretty clear that those are securities. In fact pretty much anything that isn't a top-2 coin at this point is subject to this sort of behavior from what I've seen.
3 I'd quibble with you about "overwhelming majority", but yes that's a common use of gold. It's a fairly common use of cryptocurrency too though, especially in countries with high inflation.
4 Maybe in that specific situation yes. Sounds like you agree that's not all cryptocurrencies though. It's also kinda weird that something could go from not being a security to being one (and back) depending on how people happen using it at any given moment in time. E.g. If someone somehow managed to orchestrate a pump and dump scheme with silver, would it temporarily become a security for that brief moment in time and then go back to being a commodity afterwards?
Do you seriously think that cryptocurrency becomes a billion dollar industry because...people use it to do what? exactly? Pretty much 99% of the people that put money in crypto expected the price to go up and sell. I have not seen any mention of economical use except in third world countries. In which case, crypto is just a roundabout way of charity I guess?
Crypto people _say_ their technology have this and that use but all they _do_ is trade them.
> I have not seen any mention of economical use except in third world countries.
This is peak HN, if there ever was such a thing; you do realize that the Third World (an erroneous use of the term that relates to nations that were aligned with the Soviet Union but used to denote underdeveloped nations) comprises the most of the Human population; and if figures are correct about System D [0], it is actually the 2nd largest economy in the World and growing due currency collapses and hyper-inflation being wrought around the World.
In recent literature on the informal economy, System D is the growing share of the world's economy which makes up the underground economy, which as of 2011 has a projected GDP of $10 trillion.The informal economy is usually considered as one part of a dual economy.
Seriously, this is the most typical yet horridly-informed view on this matter and gets tossed in the echo-chamber; it's like saying that the USD (or any fiat currency) is really useless because the FOREX market (the biggest Industry in the World only after Agriculture) negates its utility because people only seem to trade it.
I'll be the first to tell you that 99% of crypto is a scam but seriously just stick to something you actually understand before posting these inept diatribes.
> the Third World (an erroneous use of the term that relates to nations that were aligned with the Soviet Union but used to denote underdeveloped nations)
That's not what "Third World" originally meant; Third World was used to refer to the non-aligned countries, those countries that were neither aligned with the US and NATO (the "First World") nor the Soviet Union and the Warsaw pact (the "Second World").
> That's not what "Third World" originally meant; Third World was used to refer to the non-aligned countries, those countries that were neither aligned with the US and NATO (the "First World") nor the Soviet Union and the Warsaw pact (the "Second World").
Well, I concede that point; but even then it was used incorrectly considering that these third world nations are also comprised of the most developed nations in the West: Switzerland/Finland etc...
Still, the post is seething with just as much arrogance as it was misinformed and my point remains.
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.
> I can see the argument against proof-of-stake, doesn't your quantity of tokens increase without doing anything?
It depends.
With Algorand for example where staking is "fully automated" and you don't actually even have to be online to stake or have delegated to an online party? Then yes.
With Ethereum where you run a node secured with your stake? No. You have to maintain a staking node and mitigate potential threats/failure modes which would lead to downtime. It's kinda like being paid out for an SLA. If you can't maintain uptime and correct functioning, you don't get paid and potentially you owe money. Now if you outsource the operation of a staking node, it's still the same situation but you are just outsourcing to "the cloud" or someone else.
With Cardano where you have stake pool operators and delegators? Also no. If you run a stake pool, you essentially are in the same situation as with Ethereum. You have an SLA target of practically 100% and get penalised for failing to meet it. However for delegates (people who assign their stake rather than run a pool themselves), it's still no just "money go up". You are being paid for picking reliable, functional pools and voting with your stake that they should be trusted. And that is a job that doesn't just stop once you pick a pool, you still need to monitor the pool to verify that they are performing. And it's lower risk but there is no assurance that your funds would continue to increase unless you do your job and pick pools that operate correctly and reliably.
Those cover the big variants of Proof of stake that I am aware of.
You are almost correct. It doesn't matter whether most people make a profit. It just matters that they are investing believing they will make a profit. Buying my worthless stock or investing in my pyramid scheme are both securities even if I'm the only one who makes anything.
It matters that the person buying reasonably thinks it could lead to profits. Not that it necessarily does.
ChatGPT is a text generator. It is “useful” for writing sentences in a context where correctness and understanding are less important than syntactical uniformity and word count.
Edit: Ok, I guess people want ChatGPT responses.
Risks when using ChatGPT instead of research while discussing financial securities:
Accuracy: While AI models strive for accuracy, there can still be errors or misunderstandings. They might oversimplify complex concepts, miss nuances, or even provide incorrect information. It's always a good idea to verify information from multiple reliable sources.
Bias: AI models are trained on existing data, which might contain inherent biases. Thus, the output of AI might also reflect these biases, although it is unintentional.
Lack of deep understanding: While AI models like ChatGPT can process and generate language based on patterns they learned during training, they do not possess actual understanding or intuition. They are unable to think critically or provide expert judgment.
Outdated Information: As of its last training cut-off (September 2021 for ChatGPT), the model might not have the most current information or developments in the field of financial securities.
Regulation and legality: There are regulatory considerations in financial markets, and AI models may not be fully updated or able to provide guidance in line with current laws and regulations.
> 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 or EUR.
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.
> 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?
I can certainly imagine why a country with a history of poorly managing their own currency (and that for whatever reason doesn't want to be aligned to USD) might choose to use a more "neutral" fixed supply currency.
There's a lot of nations that either directly accept tax payments in foreign currency: for example, Montenegro uses Euro. Salvador, Zimbabwe, etc use US Dollar. In other forms, Danish Krone and Bulgarian Lev is pegged to Euro.
That's why Bitcoin is so powerful: they can't do anything about it and, if people choose to use it, the government has no choice other than accept it as the standard.
a government that accepts tax payments in BTC would be abandoning its financial authority to the bitcoin network, over which it has no influence whatsoever
this is suicidal for any nation with even a nominal amount of financial autonomy
maybe it's something that failed states like venezuela or somolia would consider, but it's a complete non-starter for anyone else
the idea that "the people" can force countries to accept tax receipts in BTC is absolute unhinged nonsense, read a fucking book
> the idea that "the people" can force countries to accept tax receipts in BTC is absolute unhinged nonsense, read a fucking book
Government money will worth shit if people stop putting their savings in it. Unless you think the US government will make it ilegal to possess BTC, then it is just a matter of time for people to migrate to a better store of value.
the US government probably won't make it illegal to possess BTC, but it will never accept e.g. tax payments in BTC
also, the instant there is a non-trivial amount of commerce conducted in US jurisdictions via BTC, you will immediately see aggressive counter-measures (lawsuits, criminal charges, etc.) from the federal government
germany's minister of finance said it succinctly when there was this facebook libra thing going around
> One of the core activities of a sovereign State is to issue a currency. We will not cede this task to private companies.
Why do you care about paying taxes in funny money? I never understood complaints about inflating money by gold bugs or cryptocurrency advocates. The presence of a mismanaged currency is your opportunity to profit so you should be cheering for its collapse. The only situation where you end up losing out is if you have a fixed income in the mismanaged currency.
You want your tax bill to inflate away so the government accepting Bitcoin for taxes is not that meaningful to you.
I mean, if I follow the same logic I should advocate for collapsing the economy with tight money policies because I can then work on financial innovations that undo the government intervention.
People using crypto for funds transfer. Buy now, transfer immediately, with an expectation that the other end sells immediately. No desire or expectation of profit.
For many people inside an defintely outside the USA sphere, theres a lot of utility in holding some cash money in Crypto even as a staging point for payments.
Speaking to various security lawyers there were two terms that are extremely vague in the industry:
1) "Common enterprise". What does that mean? Gary Gensler openly said in a speech Bitcoin isnt a security because there is no "common enterprise." When he was saying these words he made a motion with his elbows like you've got a buddy. That's the closest I got into his mind for what "common enterprise" means. But really, if you go by the widest definitions, "common enterprise" means anything where various entities are all united in winning, e.g. miners mine, people buy and hold, it's all a common enterprise. By that definition, almost everything is a security, including Bitcoin, despite what even a hawk like Gary Gensler says.
2) "Equity securities". As opposed to non-equity securities such as debt. Let's say all tokens are securities. But are they "equity securities" meaning you have to register with the SEC as soon as you have more than 2000 holders? But what makes a security an "equity security" specifically? Is it the ability to vote? Then governance tokens are "equity securities". Is it the ability to receive dividends from some profits? Then maybe Liquidity Pool tokens on Uniswap are equity securities.
But nevermind that these terms are not well defined, even in the statutory law or case law. The vagueness is actually broader than that.
All shows like Yu Gi Oh, Pokemon, etc. have been running, technically speaking, unregistered securities offerings throughout the world and United States, yet the SEC does nothing. They are textbook cases of the Howey Test:
1) People (kids, in fact!) buy Yu Gi Oh trading cards
2) There is an investment of money (either they nag their parents, or they actually spend a non-trivial proportion of their own life savings)
3) With an expectation of profit. Witness how many of them don't actually use the cards, but keep them in mint condition (and as we have seen SEC successfully argue in the recent case SEC vs LBRY, if even a few people buy with expectation of profit, then ALL those sales are securities).
4) From the efforts of others -- namely the producers of the show, and their promotion of Yu Gi Oh trading cards. Trading! Perhaps even selling!
5) There is definitely a common enterprise, that isn't even decentralized. The Yu Gi Oh show is produced in Japan and shown in the USA, and drives the sales of the cards. Cancel the show, and the cards fall in price. Yu Gi Oh Abridged series even lampooned this, to great comedic effect.
Oh those foreign-owned Japanese companies, preying on our kids selling them investment contracts! Do they really think the kids are sophisticated investors who think things through when they keep their mint-condition cards! Who will buy the top and be holding the bag after the show is canceled?
So being a textbook definition of Howey, why did the SEC never go after Pokemon, Yu Gi Oh and any of the other "merchandising" companies? How about Marvel with their mint-condition comics? Isn't that a "common enterprise" since some people buy comics for their investment value?
This article was shared on HN at some point, and it shows how the SEC has at times considered even transactions outside the united states, which did not have any character you'd normally associate a security, a security transaction in the USA. So at this point it starts bordering on the absurd.
If you take Objectivism to its logical conclusion, it could seem that it's morally better to torture a man for a $100 profit, as long as you could get away with it. But then Ayn Rand throws in "as befits a rational being", as a sort of no true scotsman argument that avoids the logical conclusion.
Similarly the SEC has been using "Sufficiently Decentralized" as a way to avoid the logical conclusion that they should go after a ton of other large ecosystems. For example, Hinman famously did it with Ethereum: https://www.sec.gov/news/speech/speech-hinman-061418
Today, Gensler says Bitcoin is not a security. Tomorrow, it could be considered one.
But wait, it gets worse.
Let's remember that the STATES also have their own definition of a security. In fact, the states on the West Coast (from Washington to California) consider anything a security that puts capital at risk. Yes, that's right, even if it doesn't meet the Howey test, as long as you have put your capital at risk, it's a security transaction! You don't need an expectation of profit. Wow!
I have asked securities lawyers and they have confirmed that MOST KICKSTARTER CAMPAIGNS ARE TECHNICALLY SECURITIES SALES according to these state laws, they just don't enforce it.
Many of you live in California, so all of you who have done kickstarter campaigns have probably violated your own state's securities laws. But it's so absurd that they haven't bothered enforcing those.
About the only things that aren't at securities transactions, by the way, are donations. That's when people simply send money with no expectation in return. Hex tried to leverage that with their "sacrifices".
Think you can just airdrop coins to people? There's no "investment of money" right? Well, using human logic that would be correct. But there have been some precedent back in the 90s when people showed up to drink beer, put their contact info and got free stock, or something like that. And the SEC said that even that was a security, presumably because the contact info was worth something, or maybe some other reason, it's not actually spelled out clearly in the case law. So now, although there has never been a single SEC case going after an airdrop, lawyers are cautious.
Yes they laws are protecting you from getting free stuff in your wallet! Who knows kind of loss you can incur by getting free stuff with no obligation!
Anyway, of course there are important scams to go after and the SEC has a job to do. I think it's an important job. But I'm just showing you how absurd the thing can get if you try to use actual definitions of words in the Howey Test and take it to their logical conclusion, and what it actually means.
This isn't limited to Securities laws. Remember the Infrastructure Bill? Well, it said that a "broker" is anyone who builds software. Now if you build a wallet, you might have to KYC all your users. Except the Treasury said they won't enforce it. How nice (what about under the next admin?) Well, the Bitcoin lobby got them to exempt Bitcoin through an amendment around proof-of-work, but that's pretty much it.
Oh and Europe is about to pass the Cyber Resilience Act that might create penalties for any open source software that doesn't pass a check by their cyber security watchdog agencies, which haven't been created yet for this bill.
I'll just finish with a couple words about FINCEN, because OFAC and FINCEN are far more serious than the SEC. (And FATCA also enforces things like the Travel Rule worldwide, and soon the Travel Rule will require everyone to track everything).
You know all of you who build marketplaces and handle money? Well, you might be a MONEY TRANSMITTER. According to the Bank Secrecy Act, you have to register and then the States will slap you with a lot of requirements, like maintaining a surety bond. But, there are exemptions, I'll let you read about them here:
Here's the interesting thing. These are only exemptions on the FEDERAL level. The individual states might have a DIFFERENT definition of "money transmission business" and they might apply their own local laws to you. It might be that two sided marketplace you're building, it's violating money transmission laws in a dozen states. Maybe. I've asked lawyers for a list, and very few actually have them.
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.
Define them then, in a way that is consistent with every other law that makes use of those terms.
Do you not get taxed on your income if your paycheck is paid in bars of gold?
Would you not call purchasing something to enjoy a return from it's ownership as an investment? Whether it is a consumable, or it produces something that isn't cash?
A dinner is a classic example of consumer spending...
The only way this could be considered an investment is if you bought a crate of wine bottles at a bulk discount and sold the left over wine bottles to third parties and used the proceeds to pay for the dinner.
Some evidence that the Howey test isn't that objective and clear:
1) Gary Gensler, now SEC chairman, used to claim that 3/4 of the cryptocurrency market were not securities[0]. He has changed his tune significantly since then.
2) The SEC chairman can't answer this simple question: "is Ethereum a commodity or a security?"[1].
> Gary Gensler, now SEC chairman, used to claim that 3/4 of the cryptocurrency market were not securities[0]. He has changed his tune significantly since then.
Has he? Most of the market is Bitcoin and Ethereum. To my knowledge, the SEC hasn't gone after anyone solely cashing trading those.
> 2) The SEC chairman can't answer this simple question: "is Ethereum a commodity or a security?
He also doesn't have to answer whether a taco is a sandwich. There haven't been any enforcement actions based solely on whether Ethereum is a security.
Binance launched an ICO. Zhao raised hundreds of millions of dollars from investors, and then co-mingled investors' and clients' assets with his own. Their CCO admitted, in writing, to running an "unlicensed securities exchange." The poster child for web3 and crypto folks having no place near our financial system is such protestations that the law isn't clear. It's abundantly clear in the places it's being broken.
The fact that there have or haven't been enforcement actions against X or Y shouldn't be how we're supposed to determine what is or isn't illegal. There should be a speed limit (65mph) and if you drive over the speed limit, you should know you're violating the law. If the speed limit is "if the cops pull you over, you violated the law" then we have no clarity for entrepreneurs. At least some level of clarity for entrepreneurs is critical to a healthy economy.
I could be wrong (not a lawyer) but I don’t believe there’s a scienter requirement for unregistered offerings. Regardless, it makes the case much tighter, and will give the SEC a ton more leverage to reach a settlement.
So your position is that the US Government intends to require every creator and trader of crypto to complete registration, notification, filing requirements with SEC? They pretty obviously don't want to enforce that or ask that of our populace. So we just get them enforcing whenever they want to (probably because Zhao is Chinese, basically).
Creator, yes. If you're an issuer and sell to US persons, you have to register the issue as a security. The SEC brings the hammer down on about two issuers a month. They're still working through the ICO boom of 2017-2019, and just getting started on the NFT boom of 2020-2021.[1]
The SEC is basically reactive. They usually take action after people complain that their money disappeared. So they're always behind.
It's not just not liked by crypto people, but other very popular industries could be selling securities, if you actually apply the test. Tell me the flaw in the following, and if there is no flaw, why did the SEC never go after them to make an example:
All shows like Yu Gi Oh, Pokemon, etc. have been running, technically speaking, unregistered securities offerings throughout the world and United States, yet the SEC does nothing. They are textbook cases of the Howey Test:
1) People (kids, in fact!) buy Yu Gi Oh trading cards
2) There is an investment of money (either they nag their parents, or they actually spend a non-trivial proportion of their own life savings)
3) With an expectation of profit. Witness how many of them don't actually use the cards, but keep them in mint condition (and as we have seen SEC successfully argue in the recent case SEC vs LBRY, if even a few people buy with expectation of profit, then ALL those sales are securities).
4) From the efforts of others -- namely the producers of the show, and their promotion of Yu Gi Oh trading cards. Trading! Perhaps even selling!
5) There is definitely a common enterprise, that isn't even decentralized. The Yu Gi Oh show is produced in Japan and shown in the USA, and drives the sales of the cards. Cancel the show, and the cards fall in price. Yu Gi Oh Abridged series even lampooned this, to great comedic effect.
Oh those foreign-owned Japanese companies, preying on our kids selling them investment contracts! Do they really think the kids are sophisticated investors who think things through when they keep their mint-condition cards! Who will buy the top and be holding the bag after the show is canceled?
So being a textbook definition of Howey, why did the SEC never go after Pokemon, Yu Gi Oh and any of the other "merchandising" companies? How about Marvel with their mint-condition comics? Isn't that a "common enterprise" since some people buy comics for their investment value?
> The definition of "security" is pretty objective (Howey test)
It should be noted the Howey test applies to one type of security: investment contracts. There are other types of securities that the Howey test doesnt apply to.
> 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.
This. The Howey test really is clear. If there's an issuer behind a crypto asset, it's a common enterprise for Howey Test purposes. Bitcoin has no issuer at this point. Etherium, maybe. Just about everything else in crypto has an issuer raking off the profits.
The quote represents the most knowledgeable person in the defendant organization about the regulations, tacitly agreeing with the position on crypto stated by the head of the SEC. "Specifically, [the SEC head] claimed that 'everything but bitcoin' could be considered a security in the world of cryptocurrency, while bitcoin could be considered a commodity due to its stature and resolutely-decentralized nature." [1] The defendant entity could establish a bona fide defense, shut operations, or face the consequences. While bare crypto may or may not require "quotes like this" to allocated, crypto pioneers made it relatively trivial to determine they are acting outside the law, by issuing interest bearing crypto accounts and tying payments to the prospects of entities.[2]
I love that, at most it establishes that they think that they engage in securities dealings but what if they're actually mistaken in that regard or merely speak that way as a shorthand for recognizing that others, namely the SEC itself, thinks of them as securities dealers or whatever. Leaning on their self identification alone does sound weak when we surface these points out in the open. We have no objective test like you say then why are they even talking about this stuff. Do the hard work to define and wrestle with the necessary concepts. Sounds like this is all cutting edge stuff though.
I just had a funny thought experiment along this self identification route. "I identify as a trillionaire" and finding that claim triggering the IRS to go hunt me down to find all those taxes I never paid as a trillionaire.
Coinbase is engaged in motivated reasoning here; they're trying to find every reason they can to not label their services as securities. I'd have to look up precedents to find more detailed guidance as to particular prongs, but offhand:
1. I really need to look up case law to decide if Coinbase is right on the investment of money part here, and I suspect in part it relies on technically-detailed arguments I have no knowledge of. But if your money is locked up, it's almost certainly meets this prong, and my understanding is that staking does lock your assets for a time.
2. The not-"common enterprise" argument here boils down to "it's all down by computers, so how can it be a common enterprise?" Which feels like the sort of gotcha legal loophole that plays out poorly in courts, although I will admit that I don't know the case law in detail to evaluate this claim well.
3. Expectation of profit is derived in large part from how it's advertised, which... yeah, this is going to point towards security. I should note in particular that in trying to describe why Coinbase's staking service doesn't meet this prong sounds suspiciously like the original scheme in the case that provided the Howey test. This alone should cast significant doubt on the entire analysis.
4. The "efforts of others" again relies on the "it's just computers, so obviously it can't count, right? ... right?" style of argument as prong #2, but even less convincingly.
More accurately, Coinbase is claiming their staking service does not count as a security under the Howey Test. A judge or panel of judges will be the ones making the actual determination, Coinbase’s claim has yet to be tested in court.
The only way this even tries to make sense is by creating the idea that the obviousness of it being a security (you're lending something of value to an enterprise in hopes of generating return) doesn't count, because it's a computer or something.
Like if the exact same thing was accomplished by people it's obviously a security but since it's done by code (which was magically and immaculately conceived, presumably) then it's different somehow.
It's not different. Coinbase wants people to give them money, have them do [complicated thing] then give them a return on that money.
They compare staking to mining. Cryptocurrency mining is a business activity that fulfills the last three criteria but mining on its own is not a security. The only confusion is whether the staked cryptocurrency counts as an investment of money.
Going out on a limb here but my assumption is that the specific one probably relies on the detailed citations of law and statute contained in the 136 page complaint written and filed by government attorneys.
I would love to know what context could surround the sentence "we are operating as a fking unlicensed securities exchange in the USA" that makes it not an admission that they are operating as an unlicensed securities exchange in the USA.
There's a ton of context that could work. Anything where it's framed as either (a) untrue or (b) temporary and about to be mitigated.
"What we are being falsely accused of is: 'we are operating...'"
"We are operating... To fix this we must xyz"
But I consider the second one to make the most sense. Saying "we have a problem" is a common first step of fixing it. Saying "we will be committing a felony if I don't win this argument" is usually a good card to play.
those are both admissions, with (a) being an admission against interest. they could try and say that it was untrue or temporary (the latter being an admission of guilt, so not a smart move) but that'd be for a jury to determine, most likely.
you can't just go to court and disavow all statements you've made as being ironic or untrue, facially, as a means of end-running the claims against you. you have to litigate your defense.
They aren't both admissions. (a) is saying the context of the statement makes it clear they were saying it was untrue at the time. This happens all the time in, for instance, libel cases, where your attorney will have to submit court papers that include the words, in order, something like "freejazz kills puppies". Obviously, the rest of the sentence or paragraph makes it clear they were quoting someone.
You're right they cannot ex post facto just be like "we were joking". They would be "you're talking the quotes out of context".
And (b) can be future looking. But "temporary and mitigated" is probably a great way to go into these hearings. Maybe not according to the letter of the law, but in general it tends to work out well for the people involved. Since most agencies issue punishments to influence future behavior.
Does the context that it was written by the chief compliance offer in a work email make any difference? Should people be held to account for what they express at any time, or is “sarcasm” a valid cover your ass for any situation?
Bro, if you don't file those fcking papers I told you to file last week "we are operating as a fking unlicensed securities exchange in the USA bro", and that would really suck
when this kind of wording is used usually in english? For me typing "we" is much easier.
reason I am asking is, if text was written "e are operating as fk....." then it's very easy to claim: "oh I wanted to write "they are", when talking about FTX" and blame them for everything (IANAL)
Setting aside whether the original letter was actually capitalized, the rule is common in English writing: https://style.mla.org/capitalizing-start-of-quotation/ ("If the first letter of the first word you quote is capitalized in your source, use a lowercase letter enclosed in square brackets").
More specifically, The Bluebook: A Uniform System of Citation provides one of many sources of angst for first-year law school students in the United States. Its secondary purpose is to prescribe much of the structure and formatting of U.S. legal writing, down to whether there's a space between the period and the capital S in something like "314 F. Supp. 1217 (N.D. Tex. 1970)" (there is), and whether there is one between the period and the 3 in "945 F.3d 265 (5th Cir. 2019)" (there isn't).
The most important Bluebook rule when altering quotations is not to change the meaning of the original text. The second most important rule is to explain the purpose of each alteration through a long set of rules (whether emphasis was in the original, whether a typo existed in the original, etc.). That covers your concern.
In legal context it almost always means "We" quoted as "we" or vice versa to match the capitalization required for the context it's quoted in. if it was "e are operating" then they probably would have notated it differently.
I don't know why he quoted it like that because in the actual filing it's literally quoted as "we are operating as a fking unlicensed securities exchange in the USA bro.".
Not capitalized or missing the "w". Page 29 if you're curious. Ctrl + F also works.
I'm not sure why the tweet adds the brackets around the w, since I don't see it in the SEC complaint. Here's what's in the linked complaint. For clarity, the "emphasis added" part is from the SEC bolding the text inside the quote, not something I added.
111. As Binance’s CCO bluntly admitted to another Binance compliance officer in
December 2018, “we are operating as a fking unlicensed securities exchange in the USA bro.”
(Emphasis added.)
"The S.E.C. said the world’s largest cryptocurrency exchange mixed “billions of dollars” in customer funds and secretly sent them to a separate company controlled by Binance’s founder, Changpeng Zhao."
That's a criminal offense.
Here's the court filing.[1] This is just a civil case for now, but expect
criminal charges. "Between October 2022 and January 2023, Zhao personally received $62.5 million from one of the Binance bank accounts."
The court filing shows the structure of Zhao's companies. The SEC has figured out how Binance works.
One thing I noticed, which always felt possibly-illegal, was how Binance and other exchanges would frequently freeze up funds that didn't meet minimum withdraws. If a coin fell to too-low of a price, they'd essentially just keep them. Sure, it is only $5-100 here and there, but that all adds up. Where does it go?
With a real bank or exchange, I'd expect some ability to sweep up my accounts and get a paper check for 50 cents if needed.
If I remember correctly you could always exchange those low amounts for their shitcoin, then exchange that for something with reasonable withdrawl fees like monero and withdraw that. (or even withdraw their shitcoin and exchange it elsewhere if it was below their minimum exchange amount)
Does anyone have withdrawal minimum that are close to $100? Most of the Kraken minimums are below $1.
It's also not true that can always empty a bank account for free. HSBC wouldn't let me sweep funds out of an account with ~$4.00 in it, for example, since it was international and the transfer fee was larger than that.
Any centralized crypto exchange will ultimately end up being a scam because there is no reason for centralized exchanges to exist at all. There is no reason for anyone to hold your funds for more than what it necessary to complete a transaction. Because of this, there is really no money to be made.
It's amazing I don't see Bisq discussed more on HN of all places. It's probably the best example of how cryptocurrency should be traded. Custodial services have always been bad news. Decentralized, capable of anonymity, and with transparent prices. The last bit makes the huge spread of cryptocurrency more obvious, which would go a long way towards helping the casual user understand the volatility.
Exactly! And for the "get rich by trading" gamblers, the large spread is great as you can actually make money by providing liquidity and arbitrage to centralized exchanges.
Sure, that's what everyone said about Zhao when it was SBF's turn to be the bad guy.
With re. to Bitso specifically, a couple years ago I reached to them to let them know about a somehow serious vulnerability in their API and their response was pretty much "yeah, whatever". Really.
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 not showing a neutral point of view and any special concerns with innovation and legacy system frauds.
It doesn't matter if it is call Web3, blockchain, or whatever buzzword you like, banks have real power and a clash is inevitable now or in the near future. It took a century to dethrone Bell System [2]. It is a political and economical issue, not just an industry.
> 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].)
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.
>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.
It actually helps that the country does not have a good economy and financial systems. It's called Leapfrogging.
The same concept applies to internet access and speed in Romania. They never had widespread copper telecom system, so they went straight into fiber.
FedNow and Pix were announced around the same time, the American one just took longer. Given the latter has done in three years what volume Fedwire does in months, the lag seems reasonable.
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.
Banks in Singapore provide 5 minute inter-bank settlement. Banks in NZ provide multiple intra-day settlements seven days a week. Australia's NPP settles within one minute as a typical target.
Banks are perfectly capable of this. US banks may not be.
> that doesn't mean crypto companies should have free reign to do whatever they want for the sake of "innovation."
As a company, you're allowed to do anything that is not illegal. Law is not a whitelist of what you're allowed to do, it's a blacklist of what you're not allowed to do. And while it makes sense to create laws that protect consumers, it doesn't make sense to create laws that blanket ban experimentation with a new system until someone "explains and demonstrates why it will be better" to the satisfaction of some authority figure.
> Its the responsibility of people advocating for a replacement system to explain and demonstrate why it will be better.
No, it's society's responsibility to not create and to repeal laws that drive innovation offshore. Because ultimately it's a country's citizens, not the innovators, who lose out if a valuable piece of technology moves offshore. If Steve Jobs had to "explain and demonstrate" why the iPhone would be better than flip phones and blackberries to the satisfaction of Congress before being allowed to experiment with its design, Apple probably would have just moved their HQ to China, and Americans would be the ones missing out.
So just because Binance is committing fraud and breaking the law doesn't mean that in general we should be blocking the ability of companies from experimenting with new technology, whether or not you personally believe a particular technology will amount to anything.
> If Steve Jobs had to "explain and demonstrate" why the iPhone would be better than flip phones and blackberries to the satisfaction of Congress before being allowed to experiment with its design, Apple probably would have just moved their HQ to China, and Americans would be the ones missing out.
Apple had to comply with a ton of regulations and laws when making the iPhone. Off the top of my head, they had to comply with various product safety laws, FCC frequency allocations, and consumer protection rules.
The US (and most other countries) have a lot of regulations for managing money and investments. These apply regardless of the underlying technology being used. Legally, the only thing cryptocurrencies brought is that they didn't obviously fit into any existing legal framework. This was mostly due to a lack of judicial precedence, not because cryptocurrencies were fundamentally different.
This isn't writing laws to stifle innovation. This is using laws that already exist to actually regulate companies that have managed to avoid it before now.
> > So just because Binance is committing fraud and breaking the law doesn't mean that in general we should be blocking the ability of companies from experimenting with new technology, whether or not you personally believe a particular technology will amount to anything.
This is not new technology, it's moving the money around under the guise of new technology.
And all the same crypto-bros are very proud of the valuation of the company they are at the helm of ....and they always tout it expressed in US Dollars...not bitcoin, not ethereum, not Binance coin.
And the same crypto-bros are very proud of their net worth expressed in US Dollars
While you are here writing "let them experiment with technology dude" they concern with technology is zero, it's all about driving up the valuation and driving up the net worth (always expressed in US Dollars)
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, profit is the name of the game, all of these rich people buying politicians, etc. Who came out ahead after all this?
Much of the applied innovation in crypto hasn't been good, either. Block chain is an amazing technology, but the innovators in this space didn't stop at a decentralized money transfer system, they wanted to get rich and they scammed people.
So what kind of innovation are we talking about? Who would be helped?
> Domestic wire transfers in US takes longer and are more expensive than in Europe and developing countries such as Brazil and Argentina
A small aside on this topic: I assume/hope that the new FedNow payment system coming online in a month or so will help with transfers like this.
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.
> banks have real power and a clash is inevitable now or in the near future
Bitcoin was derailed from being peer to peer electronic cash to this strange "store of value" that doesn't store value. It heppened almost six years ago, back in 2017.
Domestic wire transfers in US takes longer and are more expensive than in Europe and developing countries such as Brazil and Argentina
Do you think the US is incapable of sending an immediate message transferring money? Of course the US has that technical capability.
AML, BSA, KYC, Anti-Fraud. These are a few of the things that slow down the transfers and add to the cost. A lot of people think they're a feature, not a bug.
Then along come money transfer services that don't have these features. They'll all either get these features or they will be shutdown. There isn't a third option.
Plenty of countries around the world have all of that _and_ instant payments.
But that takes cooperation, which is incompatible with The American Way of “Winner takes all and the more people you can downtread on the way to the top, the better”
> AML, BSA, KYC, Anti-Fraud. These are a few of the things that slow down the transfers and add to the cost. A lot of people think they're a feature, not a bug.
This is why you have to harden system at the fringes, not in the middle as old clearing systems did.
Ideally, but now you're trusting the edge. It can be done. It's also a lot harder, and requires a lot more investment in places that were not considered things to care about when those old systems were created.
AML and KYC got more intense in my EU country at the same time as instant payments became a thing. Between regular banks. I don't think those are the problem.
> banks have real power and a clash is inevitable now or in the near future
Bitcoin was derailed from being peer to peer electronic cash to this strange "store of value" that doesn't store value. It happened almost six years ago, back in 2017.
Are we days or hours away from finding out Binance is insolvent?
Anyway, it was obvious to everyone that Binance was a scam from the beginning. Anyone with a brain knows to use a quality exchange like <INSERT NEXT FAILED CRYPTO EXCHANGE HERE>.
Fawning magazine profiles are a strong contrarian indicator. Time Man of the Year is basically like making a guy king for a day before putting him inside the wicker man and lighting it on fire.
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.)
For the financial system dealing with cryptocurrencies isn't worth the risk. The banks would have to perform all sorts of AML/CFT checks on every penny that has come into contact with an exchange, and they just don't have the resources to do that.
Isn't CZ already being sued by the CFTC? Is cryptocurrency a security or a commodity and under whose jurisdiction does Binance fall? Or were they trading in both types of instruments?
The SEC complaint sidesteps what Bitcoin or Ethereum are by focussing on other transactions, e.g. the ICO and trading of BNB and the private placements of its own stock.
My understanding may be off, but I believe that Bitcoin will be able to avoid it but Ethereum may have a harder time due to the fact that contracts are pretty much baked into ETH at a basic protocol level. I'm sure if I'm wrong someone will correct me.
Ethereum will have a harder time because they launched it with an ICO, sought out investors, and the Ethereum foundation explicitly allocated themselves a share of the initial coins. AND now after the migration to proof of stake, ownership of Ether effectively gives you voting rights and administrative control of the network, not unlike a security.
Bitcoin was open and permissionless day one for anyone to mine, and Satoshi gave themselves no artificial privileges. The genesis block reward was unspendable. In practice, Satoshi ended up with a huge pile of the coins, but there was nothing that could have prevented the unavoidable obscurity and lack of awareness of such a novel and unproven project. Ownership of coins also doesn't convey any direct administrative privileges in the network. And of course, initially the coins weren't worth anything.
There aren't any reasonable arguments that bitcoin is a security, while there are reasonable arguments that ethereum is.
Gensler is a Bitcoin maxi. He tried to walk back the previous head’s statements on ethereum but unfortunately for him it cannot be done easily. However he will do his best to ban all other crypto.
I believe there is some indication that the SEC allowed only those two to fall into commodities instead of securities. And that decision may be hard to undo.
Zhao “unlawfully solicited U.S. investors to buy, sell, and trade crypto asset securities through unregistered trading platforms” while “raising approximately $200 million from private investors” and “direct[ing] Binance to assist certain high-value U.S. customers in circumventing…controls and to do so surreptitiously” [1].
If he's outside the US and the country he is in had an extradition treaty with the US, but has no comparable law in the books, wouldn't that impede extradition?
That didn't stop Montenegro from finding some other probable causes (fake passports) to arrest Do Kwon. They are now trying to decide where to extradite him. US, South Korea and Singapore all want a piece of him.
https://www.rferl.org/a/montenegro-korea-kwon-terraform/3234...
This is a civil complaint. Nobody is demanding extradition as no crimes are alleged. If Zhao is dumb enough to blow off the courts, the DoJ will get involved.
There is probably a case, but I don’t see anything that would make Zhao a priority for the DoJ. Maybe that will surface as he responds (or refuses to).
That does not matter for being sued, though perhaps it does for being punished if he gets convicted. A quick google shows he lives in Dubai though. The UAE do not have a formal extradition treaty with the US, but given their close relations I would not be super comfortable about it if I were CZ.
I really want crypto to fade away out of existence and into irrelevance, FedNow is coming soon and we don't need crypto or shady crypto exchanges like Binance.
Parsed generously, 94% of Americans is about 300mm people. That's 4% of the human population. (It's a nonsense argument nonetheless: it's not America's job to bank the world.)
GP said essentially that they hoped crypto would fade away because FedNow is coming and will make it irrelevant.
My point was that the vast majority of people don’t have a US bank account and so FedNow is in fact irrelevant, except to the 5% of people who can access it.
I didn’t expect the parse with the comma inserted before “in the US”, because it’s obviously absurd to say that only 5% of Americans have a US bank account.
"According to the report, 81% of adult Americans are fully banked, 13% are underbanked, and 6% are unbanked. The share of Americans with each banking status in 2021 remained almost constant from 2020."
What GP is saying is that most people in the world do not have an account located in the US specifically. I seriously doubt they're saying 95% of Americans don't have a bank account, which would be absurd.
Why would anyone suggest only 5% of Americans have bank accounts? How is it possible to believe that and still know English and go to HN, do you think?
Not having a bank account is a race issue? People who are not white cannot get a bank account? Poor people can't get a bank account and all non-white are poor therefore bank accounts are racist?
It's the same argument they make with voter ID laws; non whites are too stupid to successfully get an ID / open a bank account / etc. It's some of the most racist rhetoric I've ever seen but somehow it's pitched as "anti-racist".
Then, in 2015, Alabama closed DMVs in predominantly black counties, making it hard for black people to get IDs. It took a federal probe to force Alabama to reverse the decision to close the DMVs.
Eh? Every single bitcoin transaction is publicly visible to anyone that looks for it in a way that bank account transactions are not. Correlating transactions with an individual is not exactly difficult if you're determined. It's downright easy if you get the other party to accept a payment from you.
- It should be illegal to defraud unsuspecting individuals by hiding information that would necessarily clarify the riskyness of the contracts they are engaging in.
- Businesses have way more information asymmetry advantage and we want to help limit this.
- Financial responsibilities of business and individuals is something that should be looked at by a third party because this can be financing bad things and/or be unfair to the individual due to the aforementioned information asymmetry.
- Various other reasonable points, while not perfect can certainly provide conscientious arguments for the them.
It should be legal for anyone to do what they want with their own money. If they want to throw it off a cliff that’s fine too. What someone else chooses to risk is none of your business.
> other rights to other people’s money or redistribution of consequences you want me to add to the list
Glad you mention redistribution of consequences, given we're burning public prosecution dollars and court time in the United States to deal with FTX, who were downed by the same sort of embezzling Zhao and Binance seem to be up to.
Plenty of crypto operates outside U.S. jurisdiction. FTX didn't. Binance isn't.
> this discussion is about whether you have the right to make it illegal for me to do the same
If you use U.S. dollars or solicit American investors damn right I do. For the same reason you have a say over whether I can open a toxic industrial plant in the plot adjacent to your home's.
Point one just sounds like your opinion that securities regulations should not exist. Seems like a little stump-box-y to post in a thread about high-profile, blatant securities law criminality lol.
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.
Yes, I listed categories where the linkage to unwilling victims was clear to make my point.
Cryptocurrency has unwilling victims as well, but the linkage between cryptocurrency buyers and ransomware sellers is much less direct
If you want a closer analogy, gambling is also something that happens between willing participants and is almost universally either regulated or outlawed.
There are some good arguments that we need clearer, better regulations
for cryptocurrency exchanges and a lower barrier of entry for low income/asset investors into securities.
However, some level of regulation of cryptocurrency is clearly required and is not out of step how we handle other parts of the economy.
> Bribing the court
>> each one involves a victim who is, crucially, not a willing participant. People who participate in buying or selling cryptocurrency are willing participants.
The corrupt judge and barrister are very much willing. The negative effect is borne by a third party. Same with crypto. The buyer and seller are happy as can be. Then the rest of us have to pay to investigate, extradite, charge and liquidate Bankman-Fried and FTX.
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.
No, I don't. Hitmen being unavailable would make it a non-issue, and conspiracy to commit murder is already a crime. As I mentioned in another comment in this thread, the US justice system (and French, giving credit where it is due) is designed to protect the innocent minority, not pursue the guilty majority. Patchwork legislation and wasting resources pursuing consumers instead of providers results in an eroding of basic civil liberties that may not be immediately apparent when one is focused solely on the issues used to provoke such concessions.
It should be possible for non-consenting individuals to claw back their money when needed, by rules agreed to by the society they live in. Agree or disagree? More than one word, please. A full explanation is required to justify allowing DPRK and Russia to fund themselves by stealing from crypto-fools and innocent bystanders around the world.
Almost all international bogeymen are real in some capacity. The point is that they're used to invoke fear towards concession of one's right to do what they wish with their acquired capital. The US justice system is designed to protect the innocent minority, not hunt the guilty majority.
Any justice system is designed to increase the general welfare. If it unfairly target minorities, the unrest will negate any benefit. We pass laws for regulating fertilizer purchase even though it inconveniences some innocent minority because it protects the innocent majority.
If you are consistent, then Signal should be banned and KYC should be required for encrypted messengers to prevent Russia and the DPRK from being able to organize attacks.
How is that consistent? DPRK and Russia can already use their own messaging systems. They cannot create a cryptocurrency and make Americans use it in order to steal their money.
I took your complaints about financial privacy and applied it nearly word for word to communication privacy, and you switched sides. Stop moving the goalposts. You lack both consistency and honesty which is why you are losing this argument.
You've already lost the argument. There is nothing the US can do to prevent Russia and DPRK from securely communicating. There is something the US can do to prevent them from stealing money from Americans using cryptocurrencies.
Stop moving the goalposts. You support the redistribution of consequences and I do not. Simple as that. You do not have the right to other people’s money, the same way you don’t have the right to ban communication privacy, even if it were effective at stopping Russians or whatever other poor excuse you use to justify reaching into the wallets of others.
If banning things russians might use is not the redistribution of consequences, you should have no problem banning encryption. You are the only one moving goalposts here. Again, I can easily construct an example in which the ban would be effective, and you would still not support it. Without double standards you would have no standards at all.
Nearly all services the government currently provides apart from courts, military and police could be paid for by its consumers proportional to their consumption. Of course, people like you oppose that model because it forces you to pay your fair share instead of offloading the cost of the services you use to others.
> If banning things russians might use is not the redistribution of consequences
For the third time, it isn't. Whose consequences are being redistributed?
> you should have no problem banning encryption
Why should I support ineffective policy?
> Without double standards you would have no standards at all.
My standard is effective policy. Nothing of value is lost by regulating cryptocurrencies, and starving DPRK and Russia of one source of ill-gotten gains is gained.
> Nearly all services the government currently provides apart from courts, military and police could be paid for by its consumers proportional to their consumption.
Let's leave almost everyone be completely uneducated then. That's the way to run a successful democracy. /s
Are you going to continue to steal to fund the courts and military?
> You are the only one moving goalposts here.
Nobody is moving goalposts here. You simply don't understand what moving goalposts means.
Did I send money to Russians? If not, and you still wish to ban me from using crypto, it’s the redistribution of consequences.
“Why should I support ineffective policy” is precisely the moving of goalposts. Your original comment only said Russians using something is enough justification to ban it, you are now adding more conditions after the fact. You also conveniently ignored the point I made about constructing a scenario where your new goalposts are satisfied and just reposing the question. If banning encryption were an effective means of preventing Russian communication, you would support it right?
I don’t care if it doesn’t benefit you to pay your fair share. Yes, the military and courts have to be paid with theft, but you believe in those things too. Remember how I mentioned honesty and consistency? I’m honest where I’m not consistent, and since there are less instances of theft I believe are justified than you, at a baseline I’m always more consistent than you.
> Did I send money to Russians? If not, and you still wish to ban me from using crypto, it’s the redistribution of consequences
Wrong. Your willingness to accept stolen goods from Russia and DPRK is what makes them valuable. Making it illegal for you to buy them is not redistribution of consequences. Allowing people who have had their property stolen the ability to get their property back from other parties in the same jurisdiction is also not redistribution of consequences.
> Your original comment only said Russians using something is enough justification to ban it,
Your problem is not that you don't understand what moving goalposts means but that you don't understand plain English sentences. Status quo allows Russians to steal from the rest of the world. I never once said we should ban cryptocurrencies (which is as impossible as banning them from using secure messaging), only to regulate them to prevent Russians from deriving value from stolen goods.
> Did I send money to Russians? If not, and you still wish to ban me from using crypto
Once again, where did I say I want to ban you from using crypto? I merely want them regulated as much as any other money transfer services. PayPal could allow transfer to Russia and DPRK without recourse for lower cost than cryptocurrencies, but they do not because they are regulated.
> You also conveniently ignored the point I made about constructing a scenario where your new goalposts are satisfied and just reposing the question.
You are unable to construct a scenario where my original goalposts are satisfied, so you imagine a world where you could. You're simply imagining a world where you win the argument without actually presenting the arguments to win it.
> Yes, the military and courts have to be paid with theft, but you believe in those things too
So you understand that your policies are unworkable. Once you admit that it is reasonable for people in societies to band together and collect taxes to spend on the public good, it's just a question of how much and for how much public benefit. Feel free to move to Somalia if you find this concept disgusting.
You seem to continue having difficulty understanding plain English. I said the exact opposite of what you think I'm willing to allow, which is quite the feat of misunderstanding.
I support any policy where the benefits outweigh the harms. How hard is that to understand? You support policies based on how closely they fit your unachievable libertarian dogma, whether or not they are destructive.
In an imaginary world where it is possible to ban Russia from using encryption without causing other harms that outweigh that benefit, I would support that. Such an imaginary world is too nonsensical to exist though, so it is useless to even consider.
You really haven't thought this through now have you. I think the old engineering adage applies: "Don't remove something until you understand exactly what it does and why it does it"
I don't doubt that quite a few politicians were being all warm and fuzzy with various FTX people pre-collapse, but SBF is currently awaiting a long list of expected charges and I don't think anyone doubts that he's headed for jail (excluding some dramatic escape funded by hidden monies). Justice may not have been served, but it's most definitely in progress. Biden's SEC seems to be doing its job in both cases and without prejudice, albeit belatedly.
Yes and everyone thought Enron was the greatest until their fraud was exposed. When you have minimal transparency it's really easy to cook the books and look good. That's like half the point of regulations around public companies.
The victim is the tech illiterate grandmother who got sold fake money by an expensive ad, financed by cryptobros who swear up and down they're invested because it's real currency, and not so they can make a profit by indirectly scamming the tech illiterate grandmother
The victims are the large established taxpaying vendors of retail luxury goods that people with disposable income are not squandering their money at (because they squandered it gambling on cryptocurrencies).
There is a list of ways the state will allow you to waste your money. Most of the allowed ones involve taxation. Most of the prohibited ones do not.
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.
> considering the SECs unwillingness of declaring when cryptocurrencies are securities or not
The SEC has been clear about ICOs from the start. BNB was launched in an ICO. Binance then traded it on its exchange. To the degree a security is being identified in this complaint, it's BNB. Nothing in this complaint is novel law.
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.
Sure, you're totally right. But look at the lawsuit. The item you listed is one of many. You have to see that this is part of a political strategy. Look at Coinbase...
I'm not aware of that. I've seen the video of the chairman of the SEC recently, and for five minutes he refused to tell whether Ether is a security or commodity.
The same thing will happen to Coinbase. Just look at the backgrounds of their CXOs. None are qualified to be leading such a large company IMO. I bet my life the same shit is going on over there.
It does feel like coinbase will be the last domino to fall.
If you came from the future to tell me that coinbase would be shut down 5 years ago, I wouldn’t have believed you.
But after the last few years (NFT stuff, allowing sketchy coins and tokens to be pumped and dumped in their platform), it feels like it’s a matter of time.
It’s going to be a much more complicated case than binance’s, but it feels inevitable that they’ll be held accountable. It’s a shame, they had so much goodwill going in to 2020.
Maybe the best time to start a crypto exchange will be in 2025. (:
Things like this seem "unlikely until they actually happen", then hindsight is 20/20. Enron was a public company with genuine audits, and many people were surprised it was a giant pump and dump scam.
Enron (2001): Enron Corporation, an energy company based in Houston, Texas, infamously collapsed in 2001 due to one of the most notorious cases of corporate fraud in history. Through complex accounting maneuvers and deceptive practices, Enron misrepresented its financial health, hiding debt and inflating profits.
WorldCom (2002): WorldCom was a telecommunications company that engaged in accounting fraud, inflating its assets by over $11 billion. The fraud involved improperly classifying expenses as capital investments, misleading investors and lenders. The scandal led to WorldCom filing for bankruptcy, and several executives were convicted, including CEO Bernard Ebbers.
Tyco International (2002): Tyco International, a multinational manufacturing company, was involved in a series of accounting frauds. The company's CEO, Dennis Kozlowski, and CFO, Mark Swartz, were found guilty of embezzling millions of dollars through unauthorized compensation and unauthorized stock sales. They used various fraudulent methods to conceal their activities.
HealthSouth (2003): HealthSouth, a provider of outpatient surgery, diagnostic imaging, and rehabilitation services, was involved in a massive accounting scandal. The CEO, Richard Scrushy, orchestrated a scheme to overstate the company's earnings by nearly $3 billion, inflating assets and revenues. Scrushy was eventually convicted of bribery, mail fraud, and other charges.
Lehman Brothers (2008): Lehman Brothers, a global financial services firm, played a significant role in the 2008 financial crisis. The company employed accounting practices known as "Repo 105," which involved temporarily moving assets off-balance sheet to hide its financial situation. This misleading presentation contributed to investors' false perception of Lehman Brothers' stability before its collapse.
Sure, but as a public company they're legally responsible for the audit they signed off and while the Big 4 refuse to work with private crypto companies, Deloitte did choose to audit Coinbase. I just don't believe they can get away with this level of shady stuff while a Big 4 audit them and they're under extreme scrutiny for the sector from the SEC.
Before it was the "Big Four" it was the "Big Five". Look into what happened to that fifth one... (Arthur Andersen re:Enron)
It's worth noting that while we got the Sarbanes-Oxley Act out of it, it was more or less replaced by Dodd-Frank Act, which was partially repealed by Trump in 2018.
When have publicly-traded companies ever done anything wrong?
Enron (2001): Enron Corporation, an energy company based in Houston, Texas, infamously collapsed in 2001 due to one of the most notorious cases of corporate fraud in history. Through complex accounting maneuvers and deceptive practices, Enron misrepresented its financial health, hiding debt and inflating profits.
WorldCom (2002): WorldCom was a telecommunications company that engaged in accounting fraud, inflating its assets by over $11 billion. The fraud involved improperly classifying expenses as capital investments, misleading investors and lenders. The scandal led to WorldCom filing for bankruptcy, and several executives were convicted, including CEO Bernard Ebbers.
Tyco International (2002): Tyco International, a multinational manufacturing company, was involved in a series of accounting frauds. The company's CEO, Dennis Kozlowski, and CFO, Mark Swartz, were found guilty of embezzling millions of dollars through unauthorized compensation and unauthorized stock sales. They used various fraudulent methods to conceal their activities.
HealthSouth (2003): HealthSouth, a provider of outpatient surgery, diagnostic imaging, and rehabilitation services, was involved in a massive accounting scandal. The CEO, Richard Scrushy, orchestrated a scheme to overstate the company's earnings by nearly $3 billion, inflating assets and revenues. Scrushy was eventually convicted of bribery, mail fraud, and other charges.
Lehman Brothers (2008): Lehman Brothers, a global financial services firm, played a significant role in the 2008 financial crisis. The company employed accounting practices known as "Repo 105," which involved temporarily moving assets off-balance sheet to hide its financial situation. This misleading presentation contributed to investors' false perception of Lehman Brothers' stability before its collapse.
Just your average market fluctuation, or at worst an overreaction and immediate correction. It's best not to try to predict long term market cycles from the 1h candles.
Note: Even when nothing bad actually happened, this exposes customer funds to risk. It's fraudulent for me to promise to store your car in a garage, but then take it on a 140 mph joyride down the freeway.
Even if they didn't literally use customer funds to buy yachts and mansions, I have heard about pledging customer funds as collateral or using them for an acquisition which is then paid back using funds and revenue of the acquired company. It's sketchy shit that is not allowed in the regulated world that crypto companies have played loose with. Very dangerous.
Seems strange to say Justin Sun an CZ are even close to one another in terms of impropriety.
Justin Sun is a snake oil salesman, CZ potentially broke the law while running a legitimate service. One that worked and was actually quite successful.
It's not like there are much laws regulating cryptocurrency markets in the US to begin with. That's the whole point why most crypto companies avoid the US: random enforcements != clarity
But I'm really curious to see whether a large country (e.g. China) or countries union (e.g. EU) is going to provide enough clarity and security as to move the innovation elsewhere from the US.
Bullshit. There are plenty of laws, just none specifically tailored to what the crypto companies would like.
So, no _new_ laws. They still have to follow the old ones.
Not outright breaking them, emailing each other about how much you are breaking them, making memes about how much you are breaking them - yeah, that tends to be pretty well covered.
Which laws are you talking about? The way the SEC is designing some coins as security, while ignoring others is remarkably laughable. The thing is, they clearly don't have a clue. Like, tagging BUSD, a stablecoin as a security, is truly the cherry on the cake.
> As Binance’s [chief compliance officer] bluntly admitted to another Binance compliance officer in December 2018, “we are operating as a fking unlicensed securities exchange in the USA bro.”
Whoops. The press are supposed to say "allegedly" in cases like this, but when your people are on the record admitting that the business is criminal, the public tends to jump to the same conclusion that the courts will inevitably reach.
The SEC and CFTC missed FTX being the worlds largest fraud. Now they are desperately going after Binance for... being above board but not getting the right license, during a period when no licenses were offered (and still aren't). At what point is this just pointless bullshit, let exchanges register, regulate them like other exchanges (segregated funds etc) and fuck off already.
“ The S.E.C. said the world’s largest cryptocurrency exchange mixed “billions of dollars” in customer funds and secretly sent them to a separate company controlled by Binance’s founder, Changpeng Zhao.”
> during a period when no licenses were offered (and still aren't).
Uh there’s usually an important reason licenses aren’t offered for something that might otherwise require a license…and it’s not an excuse to do that thing anyway.
>The burden is on SEC to prove these allegations. If they took YOU to court, calling YOU a thief, you would expect the burden to be on them, right?
WELL, the former CEOs of Binance.US who quit after realizing CZ was the real CEO against what was supposed to be the real setup seem to have testified to the SEC...along with hints the SEC has a big pile of private messages.
A lot of “decent” people here would testify against their mother if the SEC showed up. I’m not convinced. Gensler is a fraud who is captured by monied interests. He is on your side for now, given that many here share the “MIT crypto teacher” desire to destroy that industry. Let’s see how it all plays out.
Yes this was before he was head of the SEC, but the fact that this was going on right out in the open for 10 years and the SEC took exactly no action tells me that the entire agency shared this opinion too. It doesn't take a decade to shut down an unregistered securities exchange.
> this was going on right out in the open for 10 years and the SEC took exactly no action
Ripple was sued in 2020 [1]. That’s two years from Gensler’s 2018 statement and 1 year preceding his becoming chair of the SEC [2].
Note, too, that when Gensler made those statements he was the former chair of the CFTC. And nobody is being charged for cash trading Bitcoin or Ethereum.
Ah yes, the “offhand comment by someone years before they took a position indemnifies you business for all behaviour infinitely into the future no backsies” law
If by "offhand" you mean the former head of the CFTC giving a lecture in the class he teaches on the subject at MIT while at the same time the SEC is also not taking any actions against crypto exchanges.
There isn't a "no backsies" rule, but then you will have to tell me what changed about crypto between 2018 and now that made it pass the Howey test then and fail it now if you want me to believe that the government is acting in good faith.
Has any crypto exchange been sued by the SEC for solely providing Bitcoin and Ethereum trading? That might be the vast majority of the market Gensler references, which would make his 2018 statement both remarkably prescient as well as consistent with this complaint.
I cant think of anything changing in crypto in the past five years! No markets, products, chains, methods of operation. It’s all exactly the same as it was in 2018.
Presumably you are correct and this will be thrown out as soon as it gets in front of a judge then!
"Upon assuming his CEO duties, however, BAM CEO B quickly learned that Binance, in fact, exerted and would not relinquish substantial control over BAM Trading and the operation of the Binance.US Platform. As he testified under oath, BAM CEO B did not “have any firsthand knowledge of exactly what [Binance] entity managed [Binance.US Platform’s] servers,” but he knew it “wasn’t [BAM Trading].” Similarly, he also testified that the matching engine was “presumably owned and administered by some [Binance] entity, but I have no idea which one, and then there’s other servers doing other functions.” He concluded, the “biggest risk in this company is we are highly dependent on a bunch of technology that sits in Asia.”
"BAM CEO B tried to implement plans to migrate those functions and control of the crypto assets from Binance to BAM Trading and into the United States, but Zhao quickly overruled him, causing BAM CEO B to resign approximately three months into his tenure."
"As BAM CEO B testified, “[W]hat became clear to me at a certain point was CZ was the CEO of BAM Trading, not me.” He further explained that he spent his first 80 days as CEO trying “to get these core foundational things realigned,” but “was overruled on all of them” by Zhao. BAM CEO B elaborated, “All of the things that we had previously agreed and had worked on for 80 days were suddenly repudiated with no further discussion, and on that day, I realized, huh, I’m not actually the one running this company, and the mission that I believe I signed up for isn’t the mission. And as soon as I realized that, I left.”"