Binance under CFTC investigation over trading activities: report

I signed up for Binance.US about two months back. It’s legit but a very low quality offering. Support is just massively overwhelmed and unresponsive. But most exchanges are overwhelmed now so it’s not that unusual.

joshstrange• 5 years ago

Same, I signed up when GME/DOGE both started spiking since I have DOGE laying around in a wallet. Getting coins into the exchange was easy enough and I can't comment on trying to withdraw but I can say the verification stuff is stupid-slow. I've provided info for all 3 tiers of verification and my account has sat in "pending" for over a month on the last step (first step was instant, second step took a week or so).

I can always buy BTC on coinbase and transfer them over then convert them to USD/(T) but that's not ideal.

savant_penguin• 5 years ago

"The news comes just a day after Binance announced it has hired Max Baucus, who served decades in the U.S. Senate"

The old game never changes

throwaway4good• 5 years ago

With US "long-arm jurisdiction" comes US long-arm corruption where companies with no business in the US are forced to pay US lobbyists and US has-been politicians ...

r00fus• 5 years ago

s/forced/coerced/

It's not like binance is exactly squeaky clean here. Long-arm jurisdiction means it impacts US citizens who are required to pay taxes regardless of residence.

Couldn't Binance just reject doing business with US citizens and not worry?

ahelwer3• 5 years ago

Maybe triggered by the sheer quantity of tax returns filed this year listing Binance as the platform used to trade cryptocurrency.

Binance has binance.us for Americans but the selection is much worse and it is trivial to continue using regular binance with a VPN.

thebean11• 5 years ago

I don't think you'd normally report the exchange used to trade on your tax return, just the transactions themselves.

They can definitely make assumptions, though, when you report you sold XYZ coin that's not traded on any US-regulated exchanges.

ahelwer3• 5 years ago

For cryptocurrencies there is a field where you fill out the institution on which you executed the trade.

mszcz3• 5 years ago

I never truly understood that - prohibiting companies outside of US from getting American customers. If the US govt doesn't want that to occur maybe they should police their citizens instead and see how that goes? I mean, an American citizen signs up for a service that he's forbidden from using and somehow that's the company's (that's offering that service) fault? Looks to me like trying to pass off doing your bidding to others.

JumpCrisscross3• 5 years ago

an American citizen signs up for a service that he's forbidden from using and somehow that's the company's (that's offering that service) fault?

Americans aren’t forbidden from using Binance by the U.S. The U.S. says if you’re doing business with Americans, you have to follow these rules. Binance isn’t following those rules.

One solution is to follow those rules. Another is to not do business with Americans. Either way, the obligation is on the vender. Not the consumer. (If the consumer lies about being American, the vender may be able to collect damages.)

wmf• 5 years ago

US investment regulators are determined to see investors as victims and other parties (crypto exchanges in this case) as perpetrators even if that's not quite what's happening. You can profit from something you know is a ponzi or pump-and-dump and you're still the victim. (The only exception I know of is the Madoff clawbacks.)

sakopov• 5 years ago

AFAIK, binance.com still allows logins from the US (if you have an old account from a few years back), you just can't trade in it (supposedly). However, you can transfer funds out of the account.

I had some coins stashed away on my binance.com wallets which I ended up transferring to binance.us and they sent me an email telling me that my binance.com account will be disabled after a 2 week grace period because I'm accessing it from the US. It's been more than a month now and I can still log into it. It seems that Binance took a more lax approach to this than other exchanges in the past which is biting them now.

_rtld_global_ro3• 5 years ago

It's not the case for me, I can login but my funds are a lost cause I'd suggest you transfer them out while you still can. On a hindsight I have no idea why I'd used it, it shady as hell I hope US sue them to oblivion but I doubt it would happen in a meaningful way. (rant)

elliekelly• 5 years ago

but my funds are a lost cause

Can you explain what you mean? Do they not even appear in your account when you log in? Or are you for some reason prevented from transferring them?

bitanarch2• 5 years ago

You should have got an "Account review notice" and an "Important Service Update" email from them that says you have 90 days to transfer your funds out. After that your account would be locked.

I got my funds back within that period.

Now of course, it's questionable whether it's right to just lock up peoples' money after a self imposed time limit without their consent - even though it's for regulatory reasons. But that's not the same as them arbitrarily locking up your money.

bonestamp2• 5 years ago

It's been more than a month now and I can still log into it

I'm glad I can still login. I needed the info in there to complete my 2020 taxes. I exported all my data from 2021 too incase I can't login next year. I would advise doing the same.

jcpham2• 5 years ago

This is unsurprising. They'll pay a fine.

paulpauper3• 5 years ago

that should not be hard. they can pay from one of the presumably thousands of accounts frozen and money/crypto stolen

https://www.reddit.com/r/CryptoCurrency/comments/lye4n5/bina...

freebuju• 5 years ago

Crypto subs on reddit are not exactly famous for being trustworthy sources

Tenoke4• 5 years ago

For what? They've went above and beyond to prevent US citizens to trade with their main exchange and to only leave a gimped version in the US.

paulpauper3• 5 years ago

maybe binance should be investigated for theft

https://www.reddit.com/r/CryptoCurrency/comments/lye4n5/bina...

these agencies always focus on the wrongs things to investigate

capableweb• 5 years ago

What they are under investigation for now is much bigger than some random person loosing $100K which is a small sum when you consider the size of the whole market.

And even so, nothing is stopping any agency from having multiple investigations running at the same time, one does not exclude the other and all that.

csomar• 5 years ago

To begin an investigation (by the USA) they need first to establish that Binance has been operating in the US (aka US customers).

JumpCrisscross3• 5 years ago

they need first to establish that Binance has been operating in the US (aka US customers).

Tether allegedly owns billions of U.S. dollars in a Bahamas account. Tether is a Binance affiliate. They are subject to U.S. jurisdiction.

Kranar2• 5 years ago

As per US charges against FIFA officials, the US claims extraterritorial jurisdiction over any matter involving US dollar transactions.

StreamBright• 5 years ago

First of all it is a clear case for law enforcement to get involved, I am not on Binance side on this one. However, I would strongly discourage anybody to start investing in crypto with a 100K ticket. It is much better to try it with 100USD and see how it works and start to put in a fix amount every month.

Kranar2• 5 years ago

No theft took place there. The user made an unbelievably poor decision to wire 100k out of a business account into a personal account where the names don't match up. Furthermore the person communicating with Binance is not the legal owner of the account but instead the grandchild of the legal owner.

Third, the legal owner of the account is apparently afraid of using online banking, but not afraid of cryptocurrency and this is used as a justification for not just using the simple ACH method that could have resolved this whole thing in a matter of days.

If you're Binance, everything about this looks like money laundering and Binance is absolutely in the right to have acted this way. If anything, I wouldn't be surprised if Binance reported this to the authorities.

pinkybanana• 5 years ago

To me it sounds so weird, that it is quite difficult to believe that it is not money laundering. Sounds exactly like someone somehow gained access to some old, retired persons old business account and decided to cash it out via crypto.

sjtindell• 5 years ago

I agree completely. Particularly the part of the story where they refused to use ACH. Supposedly this person has run a business before but did not employ a lawyer or even visit one at any stage?

kaetemi• 5 years ago

Considering that support asked about him logging on from different locations, I'd guess he logged on to US binance from a foreign VPN at one point. That, in combination with a wire from a business account to a private binance account. Definitely flags on that account.

Based on such flags, they might assume the source account is a stolen account, and I suppose they have to make sure the money goes back to the legitimate owner, not just back to the assumed-to-be-compromised account.

olalonde• 5 years ago

The news comes just a day after Binance announced it has hired Max Baucus, who served decades in the U.S. Senate and later as an ambassador to China, to help the firm navigate the U.S. regulatory landscape. Binance said Thursday that Baucus will provide the exchange with policy guidance and act as a liaison between Binance and regulators.

Crony capitalism is alive and well in the US...

qeternity2• 5 years ago

Binance led the migration to USDT as the default reserve currency in the crypto ecosystem.

This could get very spicy.

gruez• 5 years ago

not bitfinex?

qeternity2• 5 years ago

iFinex own Tether, but it was Binance who really led the charge.

I don’t know who the real puppet master is...they’re all in cahoots (i.e. Binance and FTX). The illusion of choice is alive and well.

Tenoke4• 5 years ago

I guess it's maybe not the case but it does feel like the US are doing everything to support trading only on the local and more limited Coinbase.

Binance has already went as far as to forbid US customers from using them, make a much worse but compliant US-only exchange, go as far as they can in finding VPN users and others who subvert the rules, hired a US senator to help them, and the US is still making more moves against them.

The situation in the US is already really tedious if you want to invest in many big (top 10, even top 5 projects) and to trade in general in some states. It's disappointing to see.

iamacyborg• 5 years ago

I mean, don't you think it's reasonable for a government to want to ensure that their citizens aren't being ripped off or able to participate in illegal activities?

Tenoke4• 5 years ago

Is the implication that (almost?) every other western country wants their citizens to be ripped off because they allow Binance? I don't think it's quite as simple as that..

kemonocode• 5 years ago

Surely that's only in the best interest of the people, just like in all the areas a major government has a vested interest in exerting a large amount of control upon. Surely.

EDIT: wording

cwkoss• 5 years ago

Another spin on this situation would be "US is going after any exchange which doesn't comply with US regs/guidance and currently Coinbase is the only exchange willing/able to do so"

AMerePotato• 5 years ago

Maybe the US needs to change it's regulations. It's handling of cryptocurrency is hostile to legitimate use of the technology. The current tax situation being the worst of it in my opinion

chizhik-pyzhik• 5 years ago

It's trivial as a US resident to use binance.com using a VPN. There is no KYC requirement and they do nothing to block VPN IPs.

FDSGSG2• 5 years ago

And a fake ID scan costs about as much as a VPN subscription... If we're going by what's "trivial", no amount of KYC will ever suffice.

Binance under CFTC investigation over trading activities: report

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