The Binance Crackdown Will Be an 'Unprecedented' Bonanza for Crypto Surveillance...

[jafo]

The Binance Crackdown Will Be an 'Unprecedented' Bonanza for Crypto Surveillance. Binance’s settlement requires it to offer years of transaction data to US regulators and cops, exposing the company—and its customers—to a “24/7, 365-days-a-year financial colonoscopy.”

Excerpt:

"One attraction of Binance, as the company grew from its 2017 founding into the biggest cryptocurrency exchange in the world, was the firm's freewheeling flouting of rules. As it amassed well over 100 million crypto-trading users globally, it openly told the United States government that, as an offshore operation, it didn't have to comply with the country's financial regulations and money-laundering laws.

Then, late last month, those years of brushing off US regulators caught up with the company in the form of one the most punitive money-laundering criminal settlements in the history of the US Justice Department. The crackdown doesn't just mean a chastened Binance will have to change its practices going forward. It means that when the company is sentenced in a matter of months, it will be forced to open its past books to regulators, too. What was once a haven for anarchic crypto commerce is about to be transformed into the opposite: perhaps the most fed-friendly business in the cryptocurrency industry, retroactively offering more than a half-decade of users' transaction records to US regulators and law enforcement.

When the Department of Justice announced on November 21 that Binance's executives had agreed to plead guilty to criminal money-laundering charges, much of the attention on that settlement focused on founder Changpeng Zhao giving up his CEO role and on the company's record-breaking $4.3 billion fine. But Binance's settlement agreements with the DOJ and the US Treasury Department also stipulate a strict new regime of data-sharing with law enforcement and regulators. The company has agreed to comply with regulators' "requests for information"—a term that carries none of the evidence or suspicion requirements necessary for obtaining a warrant or even a subpoena—to the point of producing any "information, testimony, document, record, or other tangible evidence."



PS. All of a sudden, the value of darks is evident

 

[wellington]

What will be interesting is the following flow chart, if you follow my line of thinking.

Crypto Project issues token -> under US law it could be considered a security, commodity or who knows because they still haven't given clarity.

Crypto team/project utilises Binance for offloading Corp wallet/personal

DOJ obtains access.

SEC sues project -> defence not accessed/sold to us obliterated because they blind sold to Americans on binance *Jurisdiction*.

SEC / DOJ / CFTC set sights on 20,000 tokens
Treasury coffers get full, prison system gets fresh work horses, prison stocks rally.

"What was once a haven for anarchic crypto commerce is about to be transformed into the opposite: perhaps the most fed-friendly business in the cryptocurrency industry, retroactively offering more than a half-decade of users' transaction records to US regulators and law enforcement."

Not sure what the statutes state.

But going back to the post above.

My interpretation -> 5yrs passed (SEC has 10 yrs for fraud) 5 yrs for non fraud, CFTC 6 yrs, DOJ for 5 yrs

So i am unsure whether a person using Binance would extend the statute past 5 yrs for the DOJ, if so there will be fireworks, as the DOJ are routinely used as a hammer for the SEC/CFTC

"The company has agreed to comply with regulators' "requests for information"—a term that carries none of the evidence or suspicion requirements necessary for obtaining a warrant or even a subpoena—to the point of producing any "information, testimony, document, record, or other tangible evidence." - on that day Pacer stopped producing Binance blocks lol

"Binance has also agreed to scour all of its transactions from 2018 to 2022 and file suspicious activity reports (SARs) for anything it deems a potential violation of US law from that five-year period" -> again going back to my initial post, not entirely sure how these projects will now come on-shore in the US or whether statutes would alleviate charges.

"But Perlman also says he's "excited" for the new era the agreements represent for Binance. "I feel like this is a great opportunity for Binance to set the standard for what compliance in this industry should look like," he says. "For the general community, removing concerns of illicit finance in crypto is one of the most important things we can do to drive mainstream adoption. Hopefully, the vast majority of users will feel that there's assurance here, that the funds are safer than ever, and they have nothing to worry about as long as they're not part of the very small, small group of users that use crypto for illicit purposes.""

- oh boy must be a socialist , excited over the idea of being like the gestapo.

Lot of this is looking for crimes, rather than being suspected of a crime.

 

[jafo]

Not sure what the statutes state.

But going back to the post above.

My interpretation -> 5yrs passed (SEC has 10 yrs for fraud) 5 yrs for non fraud, CFTC 6 yrs, DOJ for 5 yrs

So i am unsure whether a person using Binance would extend the statute past 5 yrs for the DOJ, if so there will be fireworks, as the DOJ are routinely used as a hammer for the SEC/CFTC

Forget it! It's a fairy tale! I've been in this War. They do NOT care and their co-counsels (the federal judges), do NOT care either.

Excerpt:
"Normally, a statute of limitations begins to run on the date when the offense is completed. See Toussie v. United States, 397 U.S. 112 (1970). Some offenses, by their nature, have attributes of nonfinality and are called continuing offenses. For example, possession-of-contraband offenses are continuing offenses. Von Eichelberger v. United States, 252 F.2d 184 (9th Cir. 1958). Escape from federal custody is a continuing offense, see United States v. Bailey, 444 U.S. 394 (1980), as is conspiracy, see this Manual at 652.

The finding that an offense is a continuing offense is disfavored. It must be found that "the explicit language of the substantive criminal statute compels such a conclusion, or that the nature of the crime involved is such that Congress must assuredly have intended that it be treated as a continuing one." Toussie, supra, at 115."

Source: 651. Statute of Limitations for Continuing Offenses

on that day Pacer stopped producing Binance blocks lol

whether statutes would alleviate charges.

They'll get whoever they can identify *and* want.

oh boy must be a socialist , excited over the idea of being like the gestapo.

He's probably one of the (unindicted) CIs doing his usual and expected "SUBSTANTIAL ASSISTANCE, 5K1.1 MOTIONS, AND RULE 35 MOTIONS" speech

They started cooperating way back then. They must have grabbed CZ or someone else while on travel in one of their vassal states or even on US soil and "twisted their arms". It's an inside job!

Lot of this is looking for crimes, rather than being suspected of a crime.

Yep! Anyone who is disliked by them or has a huge verifiable loot available for the taking, brace for impact! Ignore them ONLY if you are a Chinese citizen in China or you are located in Russia, otherwise "cut a deal" to avoid the wrath of their revenge:
In the United States Court of Appeals For the Seventh Circuit Nos. 11-1059, 11-1060, 11-1061, 11-1068, 11-1069 & 11-1070 HERBERT WHITLOCK and GORDON “RANDY” STEIDL, Plaintiffs-Appellees, v. CHARLES BRUEGGEMANN, et al., Defendants-Appellants.

Like the above case (STEIDL/WHITLOCK), there are thousands more.

I can go on and on, but why? Everyone on Binance should dot their is and cross their ts.

 

[wellington]

Binance pushing back on SEC case: https://storage.courtlistener.com/recap/gov.uscourts.dcd.256060/gov.uscourts.dcd.256060.189.0.pdf

The finding that an offense is a continuing offense is disfavored. It must be found that "the explicit language of the substantive criminal statute compels such a conclusion, or that the nature of the crime involved is such that Congress must assuredly have intended that it be treated as a continuing one." Toussie, supra, at 115."

Source: 651. Statute of Limitations for Continuing Offenses

Quote:

651. STATUTE OF LIMITATIONS FOR CONTINUING OFFENSES​

Normally, a statute of limitations begins to run on the date when the offense is completed. See Toussie v. United States, 397 U.S. 112 (1970). Some offenses, by their nature, have attributes of nonfinality and are called continuing offenses. For example, possession-of-contraband offenses are continuing offenses. Von Eichelberger v. United States, 252 F.2d 184 (9th Cir. 1958). Escape from federal custody is a continuing offense, see United States v. Bailey, 444 U.S. 394 (1980), as is conspiracy, see this Manual at 652.
The finding that an offense is a continuing offense is disfavored. It must be found that "the explicit language of the substantive criminal statute compels such a conclusion, or that the nature of the crime involved is such that Congress must assuredly have intended that it be treated as a continuing one." Toussie, supra, at 115.
[cited in JM 9-18.000]

---

Here's the thing, and perhaps my interpretation is wrong.

There is something like 2 million crypto tokens the last time i looked, the vast bulk of these crypto tokens were fly by the night hyips, ponzis, ponzi daps, yield ponzi, desktop ponzi's etc

Then there is something like 20,000 crypto tokens that were projects that either succeeded, failed, or other.

Point one (2m) = blatant fraud
Point two (20,000) = will have violated a law somewhere

Lets say the the 2m would have had many of the same crews doing on avg 5 projects = 400,000 entities x 6 persons = 2,400,000 people.

Now lets move on to point two

Lets say the 20,000 would have one singular team doing on average 1 project = 20,000 entities x 12 persons = 240,000 people.

That's 2,240,000 people.

Why is this important?

Well, my interpretation of the law as it stands is the following.

1) If you issue a token, it's a unregistered security, if it is a unregistered security that is both civil (5yr-10yr-∞), and criminal (5yr).
- Because it is a unregistered security by default it becomes fraud due to the lack of disclosure and utilising of funds (paying staff, operations etc).
- Now it is fraud - 5yr statute criminal.
- Because its now fraud it, now it is money laundering - 5-10yr/
- Because its been issued and may have utility - it is now a commodity - 6 yr statute.

2) So you now have to contend with the act itself being civil 5/10/∞ dependent on whether there was scienter planned, you also have violated criminal law, and as it exists now and is in the wild, any act could violate commodities laws.

So you have a huge cluster f**k to deal with - and this applies to Non US entities/persons also.

- If any American buys direct/indirect
- If you use USD or US Banking System
- If you use US vendors
- If you have US ops
- If you have US citizens in Decision Making of Company/project.

3) UK, EU, etc all except US, Taiwan, Israel-Now, Canada-Now consider tokens as payment, commodities or pre-payment and do not consider them as securities and the act of issuance or ICO,IDO etc is not something they regulate from that point only AML processes.

4) US considers them as securities but is fighting and failing to provide clarity in the law, 1,2 clearly define the major risks associated.

So heres the question(s):

1) x company launches x coin, x company fails in some aspects and project fizzles out
a) statute for SEC initial sale 5 yrs / 10 yrs / ∞ (civil)
b) stature for criminal 5yrs but then you bolt on ML ? is that tied to A) initial sale 5yrs? or does that just continue and continue.
c) stature for commodity 6 yrs from last event considered manipulation


2) x company launches x coin, x company fails in some aspects and project succeeds
a) statute for SEC initial sale 5 yrs / 10 yrs / ∞ (civil)
b) stature for criminal 5yrs but then you bolt on ML ? is that tied to A) initial sale 5yrs? or does that just continue and continue.
c) stature for commodity 6 yrs from last event considered manipulation

Because in 1) you will see numerous projects that will have failed for numerous reasons (nature of innovation) but for 2) you will have so many ongoing charges... like selling own tokens for marketing, providing to exchanges for liquidity etc

Commercially speaking a,c can be dealt with with good lawyers, but b is the hammer and that one is very much an open ended question.

@jafo updated

 

[jafo]

Binance pushing back on SEC case: https://storage.courtlistener.com/recap/gov.uscourts.dcd.256060/gov.uscourts.dcd.256060.189.0.pdf

Binance got Gibson Dunn (& Crutcher)??? Goddamn! That's top 15 best law firms in the US. Not to mention Daniel Nelson! That man is a rockstar Wow! I'm impressed!

The gov. again chooses to simply ignore the simple concept of: Statuta Suo Clauduntur Territorio, Nec Ultra Territorium Disponunt

This is interesting! We'll see how this plays out, but most certainly the gov. will get what they want...
I wouldn't be surprised if the "good Binance customers" get approached by US exchanges in the future or if Binance is bought out by a US exchange/firm (Blackrock?). I would NOT rule this out.

Thanks for sharing.

 

[wellington]

Did you see my commentary - questions?

 

[thomasparra]

I wonder if I should delete Binance now. I didn’t respond to their request for tax residence a few months back.

 

[wellington]

Ref Heart SEC serves suit to evasive Richard Heart in Finland, but not in person

I wonder if I should delete Binance now. I didn’t respond to their request for tax residence a few months back.

Too late all the information is retained for the DOJ.

 

[thomasparra]

Ref Heart SEC serves suit to evasive Richard Heart in Finland, but not in person


Too late all the information is retained for the DOJ.

Well I didn’t trade much there anyways, but I’m thinking going forward.

 

[jafo]

1) x company launches x coin, x company fails in some aspects and project fizzles out
a) statute for SEC initial sale 5 yrs / 10 yrs / ∞ (civil)
b) stature for criminal 5yrs but then you bolt on ML ? is that tied to A) initial sale 5yrs? or does that just continue and continue.
c) stature for commodity 6 yrs from last event considered manipulation

In theory, if the project fizzles out and there is nothing ongoing, coins don't move etc etc, company x is probably in the clear after the statute of limitations runs out, but what a crafty prosecutor(s) will do is a mystery to me. I've seen some wild imaginary stretches. Applying purposivism instead of textualism. Good question though.

2) x company launches x coin, x company fails in some aspects and project succeeds
a) statute for SEC initial sale 5 yrs / 10 yrs / ∞ (civil)
b) stature for criminal 5yrs but then you bolt on ML ? is that tied to A) initial sale 5yrs? or does that just continue and continue.
c) stature for commodity 6 yrs from last event considered manipulation

project succeeds = ongoing. This is a textbook case for them.

Commercially speaking a,c can be dealt with with good lawyers, but b is the hammer and that one is very much an open ended question.

Exactly! Here's where the defendant needs a great lawyer/negotiator to plea down to lesser charges if charged with b. ML is no joke. That's how they got Arthur Budovsky of Liberty Reserve - That guy got 20 years

Well I didn’t trade much there anyways, but I’m thinking going forward.

If it's not in the millions, they won't bother the person unless they are specifically looking at that person.

Ref Heart SEC serves suit to evasive Richard Heart in Finland, but not in person

Wow! This guy is hard to pin down, isn't he?

This is his Twitter account:

 

[Mercury]

I wonder if I should delete Binance now. I didn’t respond to their request for tax residence a few months back.

What are the potential risks for a non-US person non-EU resident holding US$ 5 figures on Binance.com?

 

[wellington]

What are the potential risks for a non-US person non-EU resident holding US$ 5 figures on Binance.com?

Seizure / Freeze orders

There’s something called civil forfeiture and the onus is on the perp/victim.

Most civil forfeitures are basically theft and you can’t fight if funds are seized.

Ie perhaps you did some work and got paid the payment was from something deemed regulatory grey (discussed above).

Epoch Times: Civil forfeiture: How the Government makes billions by taking Americans’ private property

“It’s been far too easy for the government to seize a private citizen’s property, in some cases even without criminal charges being brought,” said Rep. Walberg.

walberg.house.gov

What are the potential risks for a non-US person non-EU resident holding US$ 5 figures on Binance.com?

Other risks include - all this information will be shared (backdoor CRS).

In theory, if the project fizzles out and there is nothing ongoing, coins don't move etc etc, company x is probably in the clear after the statute of limitations runs out, but what a crafty prosecutor(s) will do is a mystery to me. I've seen some wild imaginary stretches. Applying purposivism instead of textualism. Good question though.

project succeeds = ongoing. This is a textbook case for them.

Exactly! Here's where the defendant needs a great lawyer/negotiator to plea down to lesser charges if charged with b. ML is no joke. That's how they got Arthur Budovsky of Liberty Reserve - That guy got 20 years


If it's not in the millions, they won't bother the person unless they are specifically looking at that person.


Wow! This guy is hard to pin down, isn't he?

This is his Twitter account:
View attachment 5803

He's been silent i think since the 19th i suspect he was indicted/arrested, can't see why not when you consider its over a billion $

In theory, if the project fizzles out and there is nothing ongoing, coins don't move etc etc, company x is probably in the clear after the statute of limitations runs out, but what a crafty prosecutor(s) will do is a mystery to me. I've seen some wild imaginary stretches. Applying purposivism instead of textualism. Good question though.

This is ultimately the question.

Because you've got 250,000 people that going by the laws of their countries haven't violated the law, but they could end up with indictments, civil cases, and even civil forfeiture for their salaries likewise ML/etc -> i'm unsure if ML is aligned with the initial disbursement or the last or the initial act (statutes).

Likewise you have organisations that accept payments from these projects (as vendors) and they have potential AML/BSA/ etc charges - again unsure if its the initial act (conversion/receive statutes or later).

US prison system is pay to play it benefits the US locking these 240k - 2.4m people up.

 

[jafo]

What are the potential risks for a non-US person non-EU resident holding US$ 5 figures on Binance.com?

I would move it to a hardware wallet. I have a long-time female friend, non-US person non-EU resident, who had low 5 figs on Binance. She moved it to a hardware wallet.
@wellington is correct.

There’s something called civil forfeiture and the onus is on the perp/victim.

Here is a legal piece on Civil Asset Forfeiture.
Why Civil Asset Forfeiture is Legalized Theft. JUSTICE REFORM NEWS, JUSTICE REFORM RESOURCES . Civil asset forfeiture laws allow police to seize property, money, or assets if police merely believe it is connected to criminal activity. Police do not have to file charges or even establish guilt in these cases before seizing and keeping property and there is no limit to what police can seize.

If you want to laugh and also watch something educational I recommend this report by John Oliver. Really funny Brit.

 

[thomasparra]

I would move it to a hardware wallet. I have a long-time female friend, non-US person non-EU resident, who had low 5 figs on Binance. She moved it to a hardware wallet.
@wellington is correct.


Here is a legal piece on Civil Asset Forfeiture.
Why Civil Asset Forfeiture is Legalized Theft. JUSTICE REFORM NEWS, JUSTICE REFORM RESOURCES . Civil asset forfeiture laws allow police to seize property, money, or assets if police merely believe it is connected to criminal activity. Police do not have to file charges or even establish guilt in these cases before seizing and keeping property and there is no limit to what police can seize.

If you want to laugh and also watch something educational I recommend this report by John Oliver. Really funny Brit.
Civil Forfeiture: Last Week Tonight with John Oliver (HBO)

I am in favour of hardware/paper wallets for large sums. But, it is still helpful to have a digital wallet that offers the main crypto (BTC ETH Monero etc) for digital payments, and I was using Binance for this. Not so keen to anymore. I don't even have 1000$ with them anyways.

 

[Mercury]

Seizure / Freeze orders

I know anything can happen and difficult to predict but, in reality, what is the probability that worldwide people crypto assets held on Binance could be seized/frozen?

 

[wellington]

Why Civil Asset Forfeiture is Legalized Theft. JUSTICE REFORM NEWS, JUSTICE REFORM RESOURCES . Civil asset forfeiture laws allow police to seize property, money, or assets if police merely believe it is connected to criminal activity. Police do not have to file charges or even establish guilt in these cases before seizing and keeping property and there is no limit to what police can seize.

There is of-course the question on this that continues to allude.

If X is not a crime in say EU, but the US has lack of regulatory clarity (greyness)
They have issued a token on 1/1/23 and utilised proceeds for operations/staff salaries etc.

Then you have a 5 yr statute on SEC, Federal (unregistered security ~ criminal) [1]

The forfeiture runs to 1/1/28 [2]?

or after 1/1/28?

ergo does the statutes end 5 yrs for [1] and [2] or are they ongoing for [2]

As this is another unknown risk point in buying into Blockchain based companies/tokens etc.

Very high if involved in the space -> see my commentary.

Being involved could be a liquidity provider, dev, salaried staff, vendor, etc.

I know anything can happen and difficult to predict but, in reality, what is the probability that worldwide people crypto assets held on Binance could be seized/frozen?

I am in favour of hardware/paper wallets for large sums. But, it is still helpful to have a digital wallet that offers the main crypto (BTC ETH Monero etc) for digital payments, and I was using Binance for this. Not so keen to anymore. I don't even have 1000$ with them anyways.

Lot of larger accounts people stopped using Binance in 2021 when they couldn't understand where the EARN yield was coming from.

Risk i mentioned above: List of cryptocurrency companies and projects | 11,185 results

 

[jafo]

I know anything can happen and difficult to predict but, in reality, what is the probability that worldwide people crypto assets held on Binance could be seized/frozen?

If it's not in the millions, they won't bother the person unless they are specifically looking at that person.

I wouldn't worry too much. If I had money I needed or preferred to spend it myself on Binance, I would move it to non-custodial if I didn't need it for upcoming payments/investments.

US prison system is pay to play it benefits the US locking these 240k - 2.4m people up.

Don't get me excited...

They've been pretty stagnant for a while. This could be my big break

 

[thomasparra]

What are your favorite hardware solutions? Is there a way to duplicate the keys on local laptop + cloud + paper for example, avoiding single point of storage failure? Some people use an external (usb) key, but you still need to store your keys somewhere else to keep them safe so what is the main point of it? Does it just make trading/exchanging/paying online easier?

 

[JohnLocke]

If you have a ledger and have written your words down on a piece of paper or bought this metal pin to store your secret words, then it doesn't really matter if your ledger breaks. You can quickly set up your wallet on a new ledger then.

The question is what this will mean for the overall crypto market with all this mess with Binance! And will they survive this earthquake?

 

[void]

What are your favorite hardware solutions? Is there a way to duplicate the keys on local laptop + cloud + paper for example, avoiding single point of storage failure? Some people use an external (usb) key, but you still need to store your keys somewhere else to keep them safe so what is the main point of it? Does it just make trading/exchanging/paying online easier?

get Trezor T
use Shamir Backup