Hacker News Reader

Comment by seydor | Hacker News Reader

> according to Binance’s own documents for the month of August 2020 the platform earned $63 million in fees from derivatives transactions and approximately 16% of its accounts were held by customers Binance identified as being located in the United States.

hm. 16% of users make $63M in a month? In any case CZ can dispense this unprofitable 16% and move somewhere in russia or intl waters now. Assuming that canada and EU break all ties with him

Attacking the onramps to crypto in the middle of a bank crisis is not giving out the best of vibes

(Thanks for the flagging but i m not debating this either way; i know HN is anticrypto)

View on HN

I think you read that wrong. $63M makes up 100%, not 16%. It's clearer here (and also the numbers went way up between 2020 and 2021):

https://techcrunch.com/2023/03/27/binance-and-ceo-changpeng-...

> In May 2021, Binance’s monthly revenue earned $1.14 billion from derivatives transactions, up from $63 million in August 2020, the CFTC noted. Of that amount, about 16% of Binance’s accounts were held by U.S. customers.

OK so the US is going after them for ~120M (for 2020) , when their profits were ~20B?

In any case this is contrary to the main accusation that "Much of Binance’s reported trading volume, and its profitability, has come from its extensive solicitation of and access to customers located in the United States"

AFAIK throughout the years they were publicly sending users to binance.us and did not encourage breaking the rule. Didn't seem like "Extensive solicitation"

One of the allegations in the complaint is that they did indeed encourage breaking the rule, walking high-value customers through the process of falsifying their location. For example, the CFTC has an alleged quote:

> VIP team member: Hi CZ . . . I went through list of affected API clients, it includes a number of large strategic accounts including [a Chicago-headquartered trading firm] who is currently is a top 5 client and 12% of our volume

> Zhao: Give them a heads up to ensure they don’t connect from a us Ip. Don’t leave anything in writing. They have non us entities. Let’s also make sure we don’t hit the biggest market makers with that email first. Do you have signal?

Using a US IP for trading is probably not illegal in itself, people travel. In another passage they are saying that their VIP customers created offshores to use for trading and that binance was notifying customers that looked like US to do the same. I am reading the evidence for entertainment and it seems a bit try-hard tbh

Right. The CFTC's characterization of that behavior, which I think is correct, is that VIP customers created offshore shell companies to falsify their locations and Binance encouraged them to do so.

depends, by that metric all the Swiss banks are illegal

it's not uncommon for lawful hedge funds trading equities to have offshore shell companies. Employees of those funds have these types of accounts too.

I only point this out because your comment read as if this was a smoking gun.

Not to mention sophisticated trading firms are not necessarily sending orders/instructions from the same IP. A lot of them have multiple network interfaces set up for each exchange they're trading on.

Well, Binance clearly knew the risks, so it's hard to see why they would chase US customers unless they were very profitable.

Reply on news.ycombinator.com