SEC asks for emergency order to freeze Binance US assets anywhere in the world
cnbc.com
cnbc.com
I would ask: is there even a single Binance US user that wants the SEC to take custody of their assets? instead of sticking with Binance US?
The SEC enforces the law. It’s not some kind of poll where you ask the victims whether they’ve been mostly enjoying the law-breaking activities and would like to see them continue.
This is like saying your boat sank because the water dared to come in. Yes. But there’s also a hole in it.
JP Morgan was granted a special waiver to buy FRB.
It’s pretty obvious that what happened was that SVB and FRB management teams were set up as scapegoats to save face while the government worked in the background to halt the sector from unwinding.
I happen to agree that this was the right thing to do.
The management of SVB and FRB gambled and lost. They have no one to blame but themselves. Events that followed seemed like reasonable steps to take to clean up their mess.
The Biden administration claims that this was not a bailout because taxpayers didn't pay to cover these deposits. Technically, he's right. Instead, bank customers ultimately performed the bailout. It's just the case that 99% of American taxpayers are also Federal Reserve bank customers.
So, let's go back to your "gambled and lost" argument. SVB and FRB gambled, but I lost. You lost. Your neighbor lost. That person that doesn't have a bank account and the folks that had $400M USD in their SVB accounts didn't lose.
The solution to force you and I to pay higher fees to fund a not-a-bailout for SVB depositors to prevent broader contagion was the right call, but to explain it away as merely affecting a small number of executives and shareholders is a lie.
But when you look at the scale of the bailout: how it fell to other banks to pay a special assessment to refill the FDIC insurance fund to cover 100% of deposits, you have to recognize that this event was far beyond the mismanagement at a single institution. Then, it happened again at FRB.
The solution that the government came up with to solve the issue —- creating a moral hazard by implicitly guaranteeing 100% of deposits —- undermines the claim that it was merely mismanagement.
We don’t deploy nuclear weapons as pest control.
No FTX user would have wanted its assets frozen a few years ago.
Yeah. I guess that's it right there. o_O
Right? right?
[1] When it'll drop in price, I'll be here to provide different post-hoc justification for why that market swing happened. Tune in tomorrow, as the SEC keeps unraveling this rat's nest.
Binance.US isn't the world's largest exchange.
Another case of competition suppression by the US, that's sad..
Fun read from the former French Minister of Economy: https://twitter.com/RnaudBertrand/status/1665370246126125060
"How does the market not care vis-a-vis the gruelling recent pandemic, ongoing supply shocks, mounting climate change disasters, population curve declines, military instability ....... ?"
In Bitcoin's case, it needs be remembered that:
* Bitcoin as the original (and, in some ways, least sullied) crypto asset will have the greatest resilience
* Despite these exchanges having the greatest Trade Volumes, they are each only involved with a minority of the total global assets. That is, most Bitcoin that exists, has never touched Binance. Even more, most Bitcoin that exists, existed before Binance did.
* Markets aren't that predictable - attempting to trade a market in a buy/sell manner based upon whether today is a seeming Good News Day or Bad News Day ... well, if it was that easy, we'd all be doing it trivially
* The previous point is also adjunct to the fact that, for example, "obvious selling time" is most often leapt upon (with leverage) by amateur traders - whom the market then liquidates with a sudden contrary movement. A cynical manipulation certainly not unique to crypto markets, but yes absolutely ripe for them.
> "How does the market not care vis-a-vis the gruelling recent pandemic, ongoing supply shocks, mounting climate change disasters, population curve declines, military instability .....
The progression was completely logical. Central banks deployed trillions in QE. Market participants decided that betting against institutions with so much money was not wise and joined the bull ride. We are now paying with inflation.
Remove the double-negative in my phrase "no more illogical", and my argument is that there is logical cause-and-effect in both situations, despite the easy potential for assuming a different outcome based upon select, surface assumptions.
Also some people that had USD balances in Binance might have bought BTC so as to withdraw their funds to their wallet.
As a bitcoin holder, why would I be sad that the SEC is finally fixing the crypto casinos?
Shocker.
As I get older I want the anonymity or immediacy without a paper trail for normal day-to-day small transactions. For big transactions maybe not. Also, just try and walk in nowadays to a car dealership and hand over $35k in cash for a car. See what happens.
Mandatory reporters(banks, dealerships, remitters, etc) are obligated to file these reports. These can be used under Beria’s law ‘show me the man and I’ll show you the crime’.
Right now, it is soaking up some nice 4.9% apy, but eventually I'd like to buy a car (waiting for the prices to crash a bit more). It is what she would have wanted (she bought me my first car).
I can't wait to walk into a dealership, with cash, and find out what sort of criminal I am.
The investigators are looking for patterns, and latchkey having one dead grandma and buying one car isn't a pattern. They can't see patterns if the data which would make up the pattern isn't recorded, so that why the data is collected.
Why should I have to even be reported on though?
It is my money and I'm just buying a car. I'm already registering the car with the state in multiple ways (DMV and insurance).
>investigators are looking for patterns
Oh, so now I have to be wary of falling into 'a pattern'... but that's ok cause what I'm doing isn't a pattern (today?).
This whole concept of absurd levels of tracking and being treated like a criminal, is offensive.
Ask your politicians to get rid of the portions of the Bank Secrecy Act of 1970, portions that deal with SAR, CTR.
https://www.fincen.gov/resources/statutes-and-regulations/ba...
Especially not without very carefully considering counterparty risk!
The interesting thing is that ETH switching to PoS, completely decimated the GPU mining market. This had the side effect of lowering cryptos power usage significantly and also countering all of the anti-ESG arguments against ETH.
AI needs the fastest/bestest/mostest.
which is a major difference from “the” use case
and just a use case for that company, which in any other industry we would talk about the company’s behavior not the entire asset class and industry, I find it disingenuous to have that “use case” auto reply on any article that happens to be about crypto but is really about a company
If no useless speculation scheme has ever thrived as long and as much as BTC, and it keeps on going, at what point do you have to ask if your opinion just doesn't fit with reality?
The shady exchanges and shitcoins muddy the waters but have fundamentally nothing to do with BTC and a handful of other top cryptos.
Yes, Bernie Madoff's Ponzi scheme famously ran for decades, with everyone invested calling doubters idiots and pessimists.
Until it all fell apart.
As an aside, I can think of exactly one person who benefitted from Madoff's scheme: former New York Met Bobby Bonilla, who is set to receive about USD$1.2MM from the team every July 1 through 2035. Bonilla's contract was bought out by the Mets in 2000, and instead of paying him the USD$5.9MM he was owed, the team offered a deferred payment scheme (with payments starting in 2011), as they were looking at double-digit returns from their Madoff investments in the deferred decade.
Madoff was a single individual controlling the narrative.
Bitcoin has no central actor.
The same problem existed with FTX/SBF. But when they went down, it wasn't like Bitcoin died with them.
from my perspective, there is simply a lack of coverage of things that function without incident, which are very numerous and solve frictions for a lot of people, whether you’re in the market for that or not
like construction sites that showed “how many days since an incident”, because people only heard about the incidents
that's not my standard.
cater to a market because the market exists.
there are many people in the crypto space now and they have frictions and pay to reduce those frictions, and are not defrauded in the process.
its just too late to care about your standard. you can search for it if you want, but its at the expense of so many other opportunities that have nothing to do with fraud.
its the entertainment sector, its the collectibles sector, its the financial services sector..... and the crux of most arguments and moving goalposts are that all those sectors in aggregate are worth zero when crypto is involved (or that crypto is worth zero because you're not the market for any of those sectors? lol? its a paradoxical antiquated argument)
when the only trend is that crypto-versions just begin catering to even more sectors and pulling in those audiences, or crypto-natives begin being interested in those sectors.
Privacy that is obtained by obscuring signatories or blending assets is just laundering.
"Laundering" is a bullshit concept invented to legitimize total surveillance of financial transactions. This KYC/AML stuff is just the financial arm of global mass surveillance. We must resist it vigorously for the exact same reasons we resist warrantless dragnet data collection.
I can exchange gold, or textiles or something, and not expect surveillance of those transactions. I do live in a country that requires some reporting of those for tax purposes, but not tracking of the assets the way crypto does.
The moment I pick up a monetized piece of paper that the government printed with a serial number and all that, which is guaranteed by the full faith of the government, and is standardized by the government in a global financial system, I accept some side effects, such as the government's expectation of tracking and standardization.
Similarly, the moment I pick up a crypto currency, I accept all the technical limitations / requirements of complete ledger accessibility, and methods of circumventing that are no more sophisticated than laundering.
In effect, with gov-backed money and crypto, you are forced into a system of surveillance. I don't see the privacy angle one bit.
>Where are these mystical things that function because of crypto that wouldn't function with regular money, and which also are not fraud?
Next message someone listed features, not example applications. I had two responses: that's not an application, and in addition I somewhat sloppily said that even that feature (privacy) does not exist (because it's just laundering which is defeatable).
Monero has numerous privacy features. It mixes in multiple transactions into one so that amounts, sources and destinations can't be correlated. To an outside observer, it looks like everyone is constantly transacting with everyone else. Maximizes the anonymity set.
More things then just fraud are illegal.
Please don't post comments saying that HN is turning into Reddit. It's a semi-noob illusion, as old as the hills.
Really?
The same cannot be said for cryptocurrency.
Hn usually has high quality discussions. What is it about crypto that causes us to lose our minds?
It has been a lesson to me about humans and intelligence since that time.
Still love the place though, but I learned never to let comments be the source of the things I need to investigate.
The "anti-crypto sentiment" that was the unwavering average sentiment on HN is, to me, a point of pride, and I'm thankful for it, because it inoculated me when I was most vulnerable - early on, where it wasn't obvious yet what type of people are promoting crypto and for what reasons.
What community that wouldn't have confirmation bias would understand crypto currency better? And what are their thoughts on it?
Personally, I'm fully against promoting crypto as an end all be all solution to economic problems the way that many scammers do. I'm even against trying to onboard the masses.
However, I see in crypto and smart contracts a green field of opportunity to experiment with unique forms and formats of human interaction using the medium of programmable money.
For example, I like how NFTs (despite many shortcomings) play with the concept of digital ownership. I also like how defi brings us unique financial instruments like flash loans, etc.
I think draconian regulation in this space will effectively squeeze a lot of these experiments out from under legitimate actors. It's a technology that is worth playing with. I think it's better to punish bad actors rather than raise the barrier to entry for the tech.
Of course you are right that enthusiasts of the technology would have a confirmation bias, but the opposite is also true. The confirmation bias here is that this is de facto bad.
Some HNers just aren't that interested in the use cases, which is fine. But others tend to critique decades-old technology, and don't seem interested in learning about modern solutions, since their minds are made up.
At least for me, my main concerns are with the seemingly short sighted libertarian implementations that don't take into account the bad actors of this world. I think there are definitely some issues with our current financial system, but I think its like democracy in that it seems to be the least bad solution. I wouldn't want to live in a world without regulation of our financial markets. It is too easy for people to defraud the little guy and for criminal organizations to prosper. Do you think there are solutions in newer technologies for those concerns?
I feel like both sides should be able to agree that there are pros and cons to the different technologies and use cases, that there are some that are better for the pro camp and less negative for the against camp. Maybe pushing harder to make the cream rise to the top could make these conversations less tribal and divisive?
To be clear, that is absolutely not solved for Bitcoin, which still wastes energy at a disgusting rate. Some crypto things have shifted to non-proof-of-work approaches, usually proof of stake, but Bitcoin is still pumping out more CO2 than many countries.
It wasn't as bad as some forums, since some skeptical voices were present too, but there absolutely was a ton of breathless hype over the years.
Here's just one example, when stripe added bitcoin support [0]
I personally feel like HN sentiment finally "turned" on crypto only after some of the more egregious scams started going really mainstream - in the months leading up to and during the pandemic.
I went back a decade and randomly clicked on a discussion and found most of the comments constructive and matter of fact. Perhaps I got lucky, but it lines up with my memory of the period.
Personally, I think I can reason through a great number of things. But I still get depressed, angry, jealous, happy, enthused, etc. in ways that reason has to catch up to, before the instinctive emotion makes itself public - and sometimes reason does not or cannot catch up.
(Generally the positive ones I leave to run wild, but sometimes they need to be suppressed too).
Almost on the actual topic, I think cryptocurrency has proven it's use case in the global transfer of value without a centralised third party. And that, in itself, is pretty amazing. All the rest is the application of this technology having to work itself out.
The whole argument about criminal activity or porn or whatever is just proof of the use-case. The internet itself was accused of just being a conduit for porn not really that long ago.
Because it's related to "value (transfer)" means it should have been considered inevitable that it would attract, well, the kinds of people it has obviously and very publicly attracted. And that nicely ties off the loop of human nature...
It's a sobering moment when you realize that a lot of tech is actually net negative to you - not the least because it outsourced to you the work that previously was done, much more efficiently, by specialized labor.
HackerNews was weirdly credulous about this stuff for a weirdly long time, but it does seem to have shifted in the last few years.
1. At this stage of the game, there is not a lot new under the sun to discuss that is likely to alter people's opinions. I would say that I did think there were some good comments in some of the other posts about what constitutes a security by the legal definition, and helped me understand better the specific points of the SEC's argument. This story, though, is just about the SEC wanting to freeze Binance US's assets. To be frank, I don't think there is a lot of substantive things to discuss about this particular story.
2. I feel the need to roll my eyes whenever I see the "Well, it's well known HN hates crypto..." lamentations. I will only speak for myself, but I don't "hate crypto". On the contrary, I remember reading the Bitcoin whitepaper early on and thinking how brilliant it was. As time has gone on, however, I've simply come to the conclusion that most crypto technology has very little actual utility. I believe the primary thesis of crypto enthusiasts, that it can somehow "escape" the legal frameworks of human beings (the "code is the law" stuff), is just fundamentally wrong and misguided. I think things like NFTs are just dumb. All this coupled with the fact that the crypto "ecosystem" has drawn in the scummiest set of characters I can think of, and that I think its net utility over the past decade has been negative, just leads me to believe that most crypto technologies deserve to die. This isn't some irrational "I hate crypto" take. This is my (fair, in my opinion) assessment that crypto has little overall utility. I also think this is highlighted by the fact that the amount of real crypto utility that its backers can point to is extremely limited.
In general, I think the HN community is by-and-large quite rational when it comes to evaluating and discussing new technologies. I'm not saying it is always "right", and of course you always have fan boys on all sides, but I do think that reasonable, insightful comments about crypto still bubble to the top.
Crypto is interesting as a kind of libertarian pseudo-oppositional secular religion that flatters itself that it's edgy and non-conformist but is actually dead-centre mainstream in a capitalist culture with consistent shades of criminality dedicated to making money at any cost.
The tech is interesting, it was still embedded in and made to promote an ideology that's frankly just immature fantasy. You can't separate the symbol from the religion it was born in, and born to promote.
And yet multibillion dollar companies whose entire business is illegally running hotels or taxis get nowhere near the vitriol?
Airbnb clearly causes harm for locals in popular tourist cities.
I have perturbed many electrons around here on both illegal taxi companies and shitty world-burning cryptography. I contain the capacity to think more than one thing is awful society-corroding trash.
Do you not?
They’re locked into irrationally promoting crypto because it’s the only way to protect their “investments” and their dignity.
The other large contingent, myself included, sees the never ending scams, shady dealings, and blatant money laundering. Some of these projects, like Bitcoin Lightning Network, are like honey pots for smart people that have no idea how serious the government is about sanctions.
Don't miss: and energy costs grow much faster than linear with that expansion, and the incentives are all wrong - with traditional financial systems, energy expenditure is waste, upkeep, something you need to pay but want to minimize; with PoW, it's value generation and something everyone wants to maximize.
Long-term, fossil fuels don't even matter here. Even with 100% clean energy derived from a Dyson sphere or something, it's still pure waste of energy, done for the sake of not having to ever trust each other. What crypto people missed is that trust is a feature, not a bug.
The First Law tells you can't create or destroy energy, but you can transform it. The Second Law tells you that this transformation always reduces the amount of useful work you can extract from it. This is how energy is "used up" - it's transformed from a high-grade form (e.g. electricity) to a lower-grade form (e.g. waste heat). Per the Second Law, you can't then go back the opposite direction.
(For a hands-on example, compare the utility of an egg vs. that of a smashed egg, and the amount of effort required to convert one into the other.)
So no, Proof of Work isn't destroying energy, but it's wasting it. It's literally the whole point: you're meant to burn high-grade energy down to waste heat in order to prove you can afford it - there is math to show that trying to make it not wasteful (by e.g. doing some useful math like protein folding, instead of brute-forcing a random hash) creates incentives that defeat the whole system that PoW is supposed to establish.
Waste as a rationale depends on the assumption that the Earth's atmosphere heats up as a result of any excess power generation beyond equilibrium solar radiation, and so there is a limited power budget available to humanity for "useful" work.
Asking the question of whether someone finds it acceptable for PoW to be performed in space or on the Moon is a useful way to discuss crypto when someone just wants to make the climate change argument because it separates the concerns.
Today, this may be increasing fraction of energy generation on the planet. In 50 years, this may be dedicated space satellites beaming energy from the sun. 500 years later, a Dyson swarm constructed for the sole purpose of keeping the blockchain going.
Nah.
So with K3 civilization, we're not talking about dismantling a few planets - but rather dismantling the neighbourhood galaxies.
There may simply not be that much that is novel to be said about this. The SEC's complaint was discussed at length yesterday. This order is a prophylactic procedure tied to the complaint. It seems even the best of us fill vacuums with tribal genuflection.
People are unable to have discussions when talking across a divide where people who think one thing think things that cause pain for the other side.
If you have money in crypto, you think you're rich. The thought you might not be tends to be painful.
If you are in tech and don't have money in crypto, you think crypto is a scam. The thought you missed out tends to be painful.
Those two groups aren't going to talk to each other very well.
tl;dr: frustration towards people in the cryptocurrency scene, feeling they've gained wealth through luck rather than skill or hard work. Also a disdain for how some cryptocurrencies are overzealously promoted.
It was the top comment of a 640 comments thread, so it presumably had a lot of up votes and is representative of how HN feels about cryptocurrency.
Unfortunately, the low quality discussion on crypto related threads dates back a long time and some of us just got tired of always correcting the same misinformation and low effort criticism.
Please, point out one single application of blockchain that is useful and more efficient, beneficially transparent, and faster than a different implementation that doesn't utilize blockchain. Being somebody who is a big fan of blockchain yourself, surely this should be a very straightforward thing to point out.
If that's how you feel then you're not going to like startup culture in general. Every second SaaS founder thinks that they're changing the world with the launch of their crappy CRM #3432.
- At least for me that's it, it would be stressful to deal with that so I go elsewhere to discuss the technology.
And this is probably precisely how an echo chamber can be created even without recommendation algorithms.
The "in-group" harasses the "out-group" until all of them leave - or not dare to speak anymore - and only the "in-group" is left.
I think refraining from posting due to fear of downvotes is a massive disservice to HN. People should be exposed to views of all kinds. It wouldn't be very interesting if we all agreed. I actively try to post and reply even when downvoted. In the course of doing so I often discover that I'm not alone. Posting freely seems to somehow embolden others to reply as well.
Besides, I've got what 17k HN points? I can't even keep track of them anymore anyway.
I'm not going to evangelize for seeing other positions, when the majority seems to prefer one-sided views.
No evidence for this, but I think more commonly people refrain from posting because if you have a controversial opinion you don’t get one thread of posts to reply to suddenly everyone piles on and you’re “discussing” it with 50 different people.
This is a fundamental flaw in link aggregator style social media where the community is large.
It’s debilitating to have people throwing their 2c in to a growing tree thread and bounce! At least with linear vbulletin forums of old people would have to scroll past the conversation or look like idiots when they reply something totally out of context.
> At least with linear vbulletin forums of old people would have to scroll past the conversation or look like idiots when they reply something totally out of context.
Alternatively, they'd recreate threads via extensive quoting, leading to massive in-line quote trees... Socializing is a messy affair no matter what we do, I guess.
So, you have to consider that when talking about downvotes being discouraging— for people that don’t submit stories it can feel very real.
I care a lot more about the names of people than internet points. I've commented on threads here only to realize days later I was interacting with the creator of a major programming language. Some people are interesting enough that I've bookmarked their comments page.
Especially as none of this is new. It's been obvious since the mtgox collapse, nearly a decade ago, that offshore unregulated "institutions" run by small teams of opportunists were going to be extremely risky places to put your money. It's been obvious for a long time that selling tokens to people with the expectation of profit later that could only materialize from selling to others (no fundamentals) was fraudulent, which the SEC is gradually catching up on enforcing.
The remaining questions are political, and as such unresolveable. Delusional people who thing the US dollar has been on the verge of collapse since 1932 vs people stuck in actual collapsed currencies who want access to pseudodollar banking. Europeans annoyingly pointing out that regular bank transfers can be free and quick vs Americans insisting this is impossible.
That’s the tradeoff of an open web. When you have a limitless design space, you get lots of trash.
But saying “websites are a scam” is just disingenuous to the fact that some websites are very legit and very useful.
Lmao keep deluding yourself. What the hell did y’all put in this kool aid.
But it was hyped up to be the future, cure cancer, end poverty etc.
And now none of that has materialised it is just being hyped "down".
People are understandably disappointed or disillusioned. But unbridled pessimism is no more realism that unbridled optimism.
You see the same basic "roller coaster" with other "phenomenon". Elon Musk was a god, now he is the devil. Obama had the same Hope->Disappointment thing. Self driving cars, fusion (and fission) power, various climate accords, there are many examples. AI is the current biggest bubble.
To speculate wildly: I think it is caused by a mix of the same bubble-forming forces you see in financial markets AND a sort of In-Group psychology of humans where they value "being on the right side" (where popular=right) very highly.
Crypto is a strong example but not unique I think.
It's concerning that people on HN are not introspective enough to see what their own psychology is doing to them, but the same applies to me some times. Minds are slippery...
It doesn't.
That doesn't deny its purpose though. I've gotten paid via XMR for programming tasks. Anonymously, even. The fact people treat cryptocurrencies like stocks doesn't nullify that.
The truth is the true source of all problems in this space is the exchanges themselves. They are literally unregulated banks in disguise. Cryptocurrencies should not be regulated at all but exchanges definitely should be.
If it's ever going to become more than a playground for scam artists, the industry needs real leadership that doesn't just brush every scam away with a meme.
Exchanges should be used to exchange, not as a bank where you store your crypto.
This obviously happens so often /s
Cryptocurrency is absolutely valuable as a defense against government idiocy. That fact cannot be denied.
The article explains why cryptocurrencies are in use in Argentina despite the risks: mostly because Pesos or USD can have worse risks.