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Binance was slapped with a $4.3 billion fine because it let groups like Hamas and ISIS receive funds: Treasury Department

https://www.businessinsider.com/binance-cz-fine-hamas-islamic-state-treasury-department-2023-11

"Can barely buy an AK-47 with 600 bucks," a Binance compliance staffer told his boss in 2019, per regulators.

Binance was slapped with a $4.3 billion fine because it let groups like Hamas and ISIS receive funds: Treasury Department::"Can barely buy an AK-47 with 600 bucks," a Binance compliance staffer told his boss in 2019, per regulators.

50 comments

db2

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There's just no way the US dollar could ever possibly be used that way. 🙄

redcalcium

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How do those companies pay these gigantic fine? $4 billion wire transfer? Does the bank even allow wiring that huge amount of money? Monthly Installment? Trucks carrying palettes of money?

stifle867

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The balance is kept at a bank and the banks have ledgers with the reserve bank who in turn adds $40B to the asset column and negates $40B from the liabilities column. That's the basic version. Nothing changes hands per se. It's just 1s and 0s on a computer.

pillars_in_the_trees

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In cobol nonetheless.

0x0

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You mean COBOL.

cheese_greater

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Fraudsters HATE this one old-timey computer language

Edit: for real tho, can learning COBOL easily translate into some bank or bank-adjacent role even if they don't have a CS degree or whatever?

stifle867

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I've heard 2nd stories of the few old-timers who still know COBAL, FORTRAN, etc who have very generous salaries working in sectors like banking. It's probably too late now though.

theherk

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Isn’t too late. Work in a very large bank. Some of the COBOL underpinnings will probably never die. The same cannot be said for their maintainers.

hamptonio

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You're probably better off learning java at this point, its the future equivalent of COBOL for banking.

0x0

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It's on my to-learn list.

stifle867

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Either that or a literal Excel spreadsheet.

redcalcium

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My bank only allows like $2 million dollars online wire transfer per day on their corporate account. Transferring billions would probably requires you to meet with your bank's account manager?

stifle867

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I'm unsure if the details of that process are public but presumably it is possible through coordination with the bank, the treasury department, or both. What I could find publicly was that CZ's personal fine of $70m is payable either by ETF, cashier's check or money order.

EDIT: This rabbit hole also led me to find out that this year, British American Tobacco has a $500m fine for violating some Weapons of Mass Destruction regulation. It sounds horrifying but they basically sold equipment to make cigarettes to the DPRK and tried to hide it. It's confronting seeing proof how blatantly corporations act. There was actual people who decided to do this.

veroxii

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I'm guessing if you have to pay the government, you can get government approval.

oce

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They hand over their chest full of gold coins and jewels.

RizzRustbolt

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Or a sack of cash with dollar signs on it.

dhork

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They probably just use crypto

Madison420

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They don't, they'll settle for like 20% of the total.

Salamendacious

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Changpeng "CZ" Zhao, the cofounder of Binance and a central figure in the crypto world, is also stepping down as CEO under the settlement.

...

Zhao is pleading guilty to breaking anti money-laundering law, per the justice department. Zhao will personally pay $50 million in fines, and faces up to 18 months in prison,

Man I feel like he's getting off light honestly and I saw there are more charges from the SEC but how is he the only one facing time?

Mercival

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I love how just a year ago, he was the one to call out FTX.

People in glass houses shouldn't throw stones and all that...

The whole industry seems like a criminal plot at this point.

sv1sjp

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Binance has no problem with its clients. FTX literally invested the money of the people in high risk assets, and they ended up bankrupted.

In the day of the Binance's trial, people withdraw more than billion of dollars worth Cryptos. Binance didn't end up bankrupt as they are holding A LOT.

shortwavesurfer

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Centralization allows for this. If people exchanged crypto peer to peer transaction amounts would be much smaller and no one person or company would have nearly as big of a share as binance. So I will continue to say not your keys, not your coins.

sv1sjp

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If you are trading, its a cheaper choice. (Except if you are trading in Blockchains like polygon) Also, "not your keys not your coins", but most people are losing access to their Facebook account (without 2FA), they have no chance to keep their own keys..

shortwavesurfer

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People need to learn to take responsibility. If they lose their money once or twice, they won't do it again, because they will figure out exactly how to not lose their money. Losing access to a Facebook account is inconvenient because you have to do the whole forgot password thing, but losing access to your money and knowing there's no way to get it back is a whole different story.

cheese_greater

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I feel like you don't get duality of outcomes is for the poors. Rich people get their nut and they get it back. Always. I've read somewhere its like Rule #0 or #1 🤔

shortwavesurfer

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If a rich person is using crypto the way it is meant to be used with holding their own keys, then they don't get their money back either if they lose their keys. Literally, it's not your keys, not your coins. If they don't have the key, they don't have the coins no matter who they are.

cheese_greater

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Nacho ;)

JamesNZ

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We only know ftx was stealing due to a run on the exchange. Binance could also easily be in the same boat, we just don't know, as they have not been tested for there liquidity. Also it turns out ftx pretty much had the money, but it just was not liquid.

sv1sjp

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Βinance has shared publicly many of its wallets in many Blockchains.

JJROKCZ

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FTX was a scam, they literally stole from their clients. The only failure of Binance is they failed to reject certain clients certain governments asked them to reject

yiliu

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FTX stole from customers. Binance didn't sufficiently spy on its customers. They are not the same.

TheBlue22

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Crypto is rotten to the core.

tastysnacks

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I doubt he'll get time. Rich people don't go to jail. Well, he's Chinese so maybe.

tacosanonymous

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The US government pretending that they aren’t going to make money as a result of this…

geogle

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I first read Beyonce, and I was both confused and impressed by her troublemaking and net worth

stifle867

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They should use a portion of these funds to setup specific task forces to dig deeper into the company and provide oversight indefinitely. $4.3B is a lot of money, you could fund an agency forever and still have change.

kautau

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laughs in less than two weeks of pentagon funding

For what it’s worth I agree with you, but the money we spend on many agencies is wild

stifle867

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Haha yes, the Pentagon has probably "lost" more money than the totality of all fines.

It's just an idea I had, rather than directly spending out of a budget it would be a way to be self sustaining. If there is no wrongdoing then by its nature the funding would dry up and be self-cancelling. On the other hand it could generate further revenue if allowed to continue investigating.

JJROKCZ

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The problem is that the auditors will ALWAYS find wrongdoing, even if it doesn’t exist. If their funding (and therefore their jobs) depend on fines on offending organizations, then everyone is getting found to be fraudulent

stifle867

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That's definitely a real problem that would need to be considered. I'm sure it has been in great length. My gut feeling says it's workable though and the problem being more political than technical.

kautau

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I’m in full agreement. Crypto was touted as this “untraceable currency” and, surprise, it became used for nefarious means. We need more regulation on this stuff, not less, because as much as the “everyday joe” who got into crypto “because his nephew taught him about it” doesn’t want the government spying on him, really it’s massive fund transfers and money laundering for bad actors that it seems to benefit the most.

stifle867

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Especially once you've been found or pleaded guilty. If a person commits a crime of this magnitude and they go to jail, they would have probation upon release. Maybe there should be some kind of corporate probation policy? Not something up for negotiation.

drmoose

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Implying they do this for truth and justice. US just doesn't want anyone to eat their cake.

JJROKCZ

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4.3B doesn’t last as long as you think, especially once you need to staff 100’s of people, the equipment and tech they need to work, office building(s) for them. Especially if you put that office and staff on either coast. They’ll burn that in 3 years tops

stifle867

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Would they need all those resources dedicated to just one company? I feel like they wouldn't have spent anywhere near $4.3B. Considering the investigation was started in 2021 so let's say 2 years or $3B. It seems extremely unlikely and even more than 1 order of magnitude off.

autotldr

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This is the best summary I could come up with:

Binance on Tuesday reached a settlement with US regulators — including the justice and treasury departments — to pay $4.3 billion in fines for violating anti-money laundering and sanctions laws.

The treasury department said Binance failed to report over 100,000 suspicious transactions involving terrorist groups, ransomware, child sexual exploitation material, and scams.

The Hamas transactions were acknowledged in February 2019 by Binance's chief compliance officer at the time, Samuel Lim, according to a Commodity Futures Trading Commission lawsuit filed in March against the crypto exchange.

On top of Tuesday's settlement, which also resolves the March CFTC complaint, Zhao is pleading guilty to breaking anti money-laundering law, per the justice department.

"Binance grew at an extremely fast pace globally, in a new and evolving industry that was in the early stages of regulation, and Binanace made misguided decisions along the way," the blog said.

Yesha Yadav, a law professor at Vanderbilt University, told Reuters that the deal "looks designed to give Binance the chance to live another day, while removing CZ, a figurehead who has been so intrinsically linked to the growth of a business model."

The original article contains 551 words, the summary contains 185 words. Saved 66%. I'm a bot and I'm open source!

swearengen

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I traded on Binance back when they let anyone on. It was wild you could just deposit your crypto and go nuts. No docs needed and limits were very high before any type of verification kicked in so I'm not surprised it was abused.

JJROKCZ

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That’s the way currency exchange should be

drmoose

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Yeah I don't get it how people are so keen on sacrificing their freedoms for boogeymen. Surely there are other ways to prevent money laundering without fucking up the whole user experience and literally locking out big chunk of population because their missing a minor KYC detail.