Crypto Critics' Corner

,

Episode 146 – Binance and Changpeng Zhao Indicted: End of an Era

Binanace and Changpeng Zhao Indicted: End of an Era – Crypto Critics' Corner

Bennett and Cas discuss the indictment of Changpeng Zhao and the Deferred Prosecution Agreement for Binance. Read coverage of charges here. This episode was recorded on February 10th, 2024.

Cas Piancey and Bennett Tomlin discuss the indictment of Changpeng Zhao and Binance’s Deferred Prosecution Agreement.

This podcast was recorded on February 10th, 2024.

Where to find the podcast:

Other episodes mentioned in this episode:

Other resources mentioned in this episode:

Subscribe to get each episode delivered to your inbox:

We also have a Discord Server you can join here.

Where to find Crypto Critics’ Corner:

English Transcript:

00:00:05:08 - 00:00:06:11
Cas Piancey
Welcome back, everyone.

00:00:06:11 - 00:00:18:10
Cas Piancey
I am Cas Piancey. I'm joined, as usual, by my partner in crime, Mr. Bennett Tomlin. We've already been talking for an hour. We were previously joined by Molly White. If you haven't listened to it, I suggest you tune in to our last episode.

00:00:18:10 - 00:00:27:17
Cas Piancey
today we're going to be talking about Binance. And I think the main reason we're talking about this is because I was gone for so long that we didn't when it was actually transpiring.

00:00:27:17 - 00:00:41:02
Cas Piancey
I want to compare contrast and think about what this could possibly mean for Binance. And when I say compare contrast, I mean against other exchanges that have had to deal with situations like this before.

00:00:41:02 - 00:01:02:18
Cas Piancey
for anyone who's unfamiliar, I just want to say, one, Binance is, I think, still the most liquid and volume exchange, cryptocurrency exchange in the world. It is. It was founded by and largely operated by Changpeng Zhao, CZ, as he goes by online

00:01:02:18 - 00:01:08:18
Cas Piancey
they got in trouble. So yeah let's talk about what that trouble was what happened and

00:01:08:18 - 00:01:12:09
Cas Piancey
what it looks like is going to happen in the next few months

00:01:12:09 - 00:01:19:10
Bennett Tomlin
Well, the big important missing part is that in November of 2023,

00:01:19:10 - 00:01:40:19
Bennett Tomlin
Changpeng Zhao pled guilty and Binance agreed to a deferred prosecution agreement related to crimes committed at Binance, mostly surrounding money laundering, inadequate know your customer, inadequate anti-money laundering and other assorted financial regulations.

00:01:40:19 - 00:01:45:05
Bennett Tomlin
As part of this, they resolved the case with the CFTC.

00:01:45:07 - 00:02:03:00
Bennett Tomlin
They settled cases that had not yet been filed by like OFAC and FinCEN. There is still the ongoing SEC lawsuit that we've talked about before on here, but the short version of this is Binance and Changpeng Zhao were indicted for a bunch of financial crimes.

00:02:03:00 - 00:02:15:14
Cas Piancey
I assume most of our listeners know this already, but what you're discussing right now are criminal charges, right? These are these are actually crimes that have possible prison sentences and

00:02:15:14 - 00:02:25:14
Cas Piancey
other consequences associated with them. Whereas the ongoing SEC suit, which you mentioned, does not have those same caveats. It is a civil suit.

00:02:25:14 - 00:02:31:18
Cas Piancey
And so the concern is not the same for the SEC as for these these criminal charges.

00:02:31:18 - 00:02:41:02
Cas Piancey
But yet, as far as I understand it, this agreement was made and CZ and tell me if I'm wrong is now in America, is that right?

00:02:41:02 - 00:03:00:15
Bennett Tomlin
yes. CZ is in America... oh actually he was mostly in America. There was that negotiation over whether or not he could leave the country to go see a sick family member. And they felt it was likely that he was going to get approval to go see the sick family member. So is he in the United States?

00:03:00:15 - 00:03:06:05
Cas Piancey
I have no idea. It was I was that was an honest question. I wasn't trying to there is no like moving on to

00:03:06:05 - 00:03:24:22
Bennett Tomlin
he's mostly been in the United States. His request to return to the UAE just in general were rejected. But then he filed a specific request to go see a sick family member over like a discrete period of time. And that looked more likely to get approved. But now I don't remember if it did.

00:03:24:22 - 00:03:38:01
Cas Piancey
what is CZ facing here with these with this if there is a ultimately I know he's going to go to court, I know there's going to be or there's going to be some sort of settlement with the government in one way, shape or form.

00:03:38:01 - 00:03:44:22
Cas Piancey
Either he goes to trial or he reaches a settlement with these with whoever he's facing charges against.

00:03:44:22 - 00:03:51:00
Cas Piancey
But there's some very specific clauses to this agreement. Can can you delve into that a bit?

00:03:51:00 - 00:03:59:00
Bennett Tomlin
think what you're probably alluding to is the fact that he is unlikely to face substantial time in prison as a result of this plea agreement.

00:03:59:02 - 00:04:20:12
Bennett Tomlin
There specifically, he is granted the right to appeal if he is sentenced to more than 18 months in prison, is my understanding. And so it seems likely that in exchange for this plea, and his continued cooperation, he will have a brief, if any, sentence in the penitentiary.

00:04:20:12 - 00:04:29:15
Cas Piancey
most people in the nation and across the world probably don't have a clue who Changpeng Zhao is and don't know who he is in general.

00:04:29:17 - 00:04:32:01
Cas Piancey
But I think for anyone in cryptocurrency,

00:04:32:01 - 00:04:42:04
Cas Piancey
they're probably happy that he's Binance and CZ are quite important to the cryptocurrency industry. So the idea that he's not going to immediately go to

00:04:42:04 - 00:04:51:11
Cas Piancey
a long, crazy sentence like say, SBF or that he didn't just exit scam or something like SBF

00:04:51:11 - 00:05:01:02
Cas Piancey
Cryptocurrency people certainly don't have as much of an issue with him as they do with plenty of other big name actors in the cryptocurrency industry.

00:05:01:04 - 00:05:16:21
Cas Piancey
I am pretty disheartened with this deal. Not because I think, you know, I don't think at the end of the day, if we're looking at how many people were harmed, I don't think that that harmed nearly as many people as

00:05:16:21 - 00:05:38:06
Cas Piancey
SBF and the FTX executives. But he certainly broke a lot of laws like important, important financial rules and regulations and stuff that like working with terrorists and, you know, like really not good, not good allegations.

00:05:38:09 - 00:05:46:03
Cas Piancey
And the idea that he's going to see probably less than a year in prison, if any prison time at all, that he's going to get a slap on the wrist.

00:05:46:03 - 00:05:51:13
Cas Piancey
that's good enough for the government is a little disheartening to me. Maybe you feel differently about it

00:05:51:15 - 00:05:57:21
Bennett Tomlin
I don't think I feel that differently. And I think we've kind of talked about this before in this context, is that

00:05:57:21 - 00:05:59:20
Bennett Tomlin
it's the chickenshit club right?

00:05:59:20 - 00:06:19:19
Bennett Tomlin
talked about in a Jesse Eisinger book where he talks about the cultural change in many of these prosecutor's office became so focused on like the win rate, on making sure you never lost a case that many complex, difficult or otherwise less than perfectly clean cases were not advanced.

00:06:19:19 - 00:06:45:01
Bennett Tomlin
And there was an increasing emphasis among many of the lawyers who had the most to gain within the federal prosecutorial system by going for plea agreements, deferred prosecution agreements and things like that, because they counted as a win without requiring the same investment or amount of difficulty as some of these other cases. We talked about way back, like when Bitzlato came out.

00:06:45:03 - 00:06:51:12
Bennett Tomlin
I think you and I made the prediction that Binance was very likely to be a deferred prosecution agreement.

00:06:51:12 - 00:07:19:14
Bennett Tomlin
the things we cited at that time were the fact that, like it's this largely international corporation with obviously some more violation of United States laws with some amount of nexus. But that prosecuting it and bringing that case was always going to be complex and challenging the principles where it primarily in the United States, many of the assets were not necessarily in the United States.

00:07:19:16 - 00:07:43:02
Bennett Tomlin
And so it wasn't a super clean case. Broadly, I think it would be good for a system to take white collar crime more seriously and treat that severity like treat, treat the harm caused by white collar crime as significant as well. Or

00:07:43:02 - 00:07:55:17
Bennett Tomlin
if you really do not believe much harm is arising from finance violations of these various laws that suggest that there's some other problem in the laws themselves.

00:07:55:17 - 00:08:24:10
Bennett Tomlin
Right. If if these prosecutors believe the laws are right, just accurate and generally well-founded, then they need to be treating these violations as more serious. And I don't want to understate the fact that Binance's was an important tool for a variety of global money launderers. Right. I don't want to overstate it either. Like there's people who are acting like all of Hamas's funding was passed through Binance, which is nonsense, right?

00:08:24:12 - 00:08:45:09
Bennett Tomlin
But like Binance's and many of these things were useful tools were violating these regulations. And it often seems and feels as though that can all be forgiven in exchange for a one executive willing to serve a token amount, a token sentence and compliance going forward.

00:08:45:09 - 00:08:52:22
Cas Piancey
can you speak on the compliance aspect of this and how Binance is having to deal with the consequences of this agreement as well?

00:08:52:22 - 00:09:13:03
Bennett Tomlin
Yeah, I think that's going to be one of the more interesting aspects of this and is really, I think, why the US government agreed like went for this instead. The US government, I think it's DOJ, OFAC, FinCEN, get to like embed a monitor in Binance who gets access to like all the financial transaction reports and audits and things like that.

00:09:13:05 - 00:09:34:11
Bennett Tomlin
And they're going to need to like try to get audits and a bunch of other things like that to bring them into broader compliance. But yeah, finance needs to effectively share almost all of their financial information with various agents of various US government entities for the next several years. This, I think, is really why the government was willing to take this deferred prosecution agreement.

00:09:34:11 - 00:10:04:01
Bennett Tomlin
Right, is because Binance, as we've mentioned, was the largest volume exchange, was the most liquid exchange. And because of their historically lax views towards know your customer and anti-money laundering regulations was a useful tool for people looking to move dirty money and Binance itself was often complicit in this. As we've discussed on this podcast before, even like advising people directly, like make sure your flows are coming from Hydra and things like that.

00:10:04:01 - 00:10:22:02
Bennett Tomlin
Binance was again complicit in this very much, and so the US government now has a whole bunch of information about every single person, or at least some amount of information about every single person or entity who was using Binance in that way, and anyone foolish enough to continue using Binance in that way.

00:10:22:02 - 00:10:42:22
Cas Piancey
honestly, this is the crux of what I wanted us to talk about, because I think this ultimately, I guess we'll see how this I don't make a lot of predictions, but I see this and I immediately think of BitMEX, which I don't know. Probably most of our listeners at this point don't really know what BitMEX is.

00:10:43:00 - 00:10:47:02
Cas Piancey
It's do they do they do futures or spot? They do futures, right?

00:10:47:02 - 00:10:48:06
Bennett Tomlin
Yeah, their derivatives.

00:10:48:06 - 00:11:08:07
Cas Piancey
Yeah. Derivatives and futures trading of bitcoin. They were truly one of the largest when it came to volumes and movement. They had such a massive insurance fund. They owned a lot of bitcoins. They were a powerhouse in the cryptocurrency industry.

00:11:08:07 - 00:11:22:06
Cas Piancey
ultimately their executive leadership got caught up with US authorities. So Arthur Hayes ended up having to I don't think he did any prison time, but he was basically on house arrest

00:11:22:06 - 00:11:28:17
Cas Piancey
there were a couple of other gentlemen who got in trouble as well, and they also had pretty light sentences.

00:11:28:22 - 00:11:53:21
Cas Piancey
But I think the move by regulators was essentially, you got to stop what you're the way you're doing business right now and get fall into compliance and your executive leadership has to go. And so that happened. And now no one no one no one uses BitMEX. No one talks about BitMEX. No one cares about BitMEX. I still think they have a great research arm, actually, like and they track some really interesting data.

00:11:53:23 - 00:12:04:00
Cas Piancey
So, you know, credit where credit is due. There's still some interesting stuff going on over there. BitMEX But generally I don't hear traders talking about it or relying on it very much.

00:12:04:00 - 00:12:06:00
Cas Piancey
do you think that's what's going to happen with Binance?

00:12:06:00 - 00:12:08:18
Bennett Tomlin
Binance thought that what was going to happen with Binance, right?

00:12:08:18 - 00:12:17:23
Bennett Tomlin
We've talked about the February 2019 messages and stuff before when they were going to start doing them KYC or blocking IP addresses from the U.S.. I mean,

00:12:17:23 - 00:12:35:20
Bennett Tomlin
they thought that if they did it at that point that it would negatively affect their volume and the history of cryptocurrency somewhat supports that right? Like there's generally one, two or three kind of gray market popular exchanges that don't KYC very well that grow to take larger and larger portions of the volumes.

00:12:35:20 - 00:12:59:02
Bennett Tomlin
And then they either like get hacked, go bankrupt or get in trouble that they start to slip away. The surprising thing about Binance was that even after they started to implement KYC, they didn't really slip away. And now we know from like the CFTC case and this criminal prosecution that part of the reason they didn't really slip away is because they weren't really doing KYC.

00:12:59:04 - 00:13:11:11
Bennett Tomlin
Right. That kind of strange dynamic that's been interesting for me to watch since the indictment is how Binance has maintained their position so far and that there's even been some, like

00:13:11:11 - 00:13:29:05
Bennett Tomlin
strange bits of noncompliance that I can't quite figure out. Like there was a recent situation where, like Binance was supposed to be paying some fine in Uzbekistan related to noncompliance, and it was some piddling amount like $8,000 or something.

00:13:29:07 - 00:13:39:20
Bennett Tomlin
But they hadn't paid it yet. And like that seemed extraordinarily strange because it's, again, $8,000,

00:13:39:20 - 00:13:55:04
Bennett Tomlin
which suggests to me that the efforts of the new compliance professionals hired since the indictment and the monitors still have a ways to go to bring Binance into compliance in every jurisdiction in which it currently operates.

00:13:55:04 - 00:14:02:16
Cas Piancey
I would suspect and maybe I'm wrong, but I would suspect that they're thinking about leaving a lot of jurisdictions that they're currently in

00:14:02:16 - 00:14:06:17
Bennett Tomlin
Well, I think practically they're probably going to have to being somewhat glib, but like

00:14:06:17 - 00:14:09:19
Bennett Tomlin
most countries have at least some amount of licensing.

00:14:09:19 - 00:14:17:08
Bennett Tomlin
And if you're no longer going to be able to really play into the craze by hoping most of these countries don't have the resources to really do anything about it,

00:14:17:08 - 00:14:28:10
Bennett Tomlin
and now you kind of have to go along with them. You're going to fade to irrelevance as you end up with what licenses in the Bahamas, the UAE, and maybe Hong Kong.

00:14:28:11 - 00:14:34:23
Bennett Tomlin
Like, that's not enough to build a cryptocurrency exchange around. Regardless of what Kevin O'Leary may tell you,

00:14:34:23 - 00:14:59:22
Cas Piancey
the actual enforcement action here wasn't really against CZ at all. The real enforcement action is if they're able to get data and force compliance from Binance, I do believe it destroys Binance's current business model. It doesn't mean they go out of business right away. You know, BitMEX is still chugging.

00:14:59:22 - 00:15:18:16
Cas Piancey
I bet BitMEX still makes a nice profit every year to like. I don't think when I say no traders are utilizing it, I don't mean no traders. I mean they're they're largely in compliance now. You don't have the same access to gray and black markets where you could just let a money laundering go and it didn't matter.

00:15:18:16 - 00:15:21:02
Cas Piancey
And they they helped your bottom line.

00:15:21:04 - 00:15:35:00
Cas Piancey
They can't do that anymore. Their profits shrink, their business shrinks and they become more irrelevant because in cryptocurrency, the name of the game is volume more than anything else.

00:15:35:00 - 00:15:47:12
Cas Piancey
and when that volume leaves, it changes everything. So I don't I don't know if there's a solid alternative to Binance right now. I don't really think there is.

00:15:47:12 - 00:15:51:08
Bennett Tomlin
Justin Sun wants to be that, but he's not solvent enough to pull it off.

00:15:51:08 - 00:16:04:06
Cas Piancey
Yeah. And there's no way that he actually knows how to build something that's reliable and equitable and like good in general for everyone. I don't think I don't even think that's necessarily something he wants to build.

00:16:04:06 - 00:16:15:22
Cas Piancey
I don't think the idea of Justin Sun making HTX formerly Huobi, that's not never going to be a competitor to Binance.

00:16:15:22 - 00:16:17:16
Cas Piancey
It already has a terrible reputation.

00:16:17:16 - 00:16:49:19
Cas Piancey
I don't know what's going to take my fiance's place. There will be something. I think the government always hopes, though, that it's similar to, I'm thinking of a couple examples. Are, Liberty Reserve or Silk Road, where after Silk Road got shut down, well, yeah, like, so the next Silk Road came up and there's been 100 alternatives to Silk Road, but none of them have been as popular as Silk Road was or had the longevity that Silk Road had.

00:16:49:19 - 00:17:13:14
Cas Piancey
and the same for Liberty Reserve, where it's like you had a illegal dollar derivative being used widely online. And when they shut that down, I mean, I guess tether is we won't get into that. But but I don't think tether certainly is far more in compliance than Liberty Reserve was when they were shut down. At this point, I would say

00:17:13:14 - 00:17:18:04
Cas Piancey
not to say they're perfectly in compliance or that what they do is acceptable.

00:17:18:04 - 00:17:42:22
Cas Piancey
In my book, it's not to be clear, but I do think that the government is hopeful that if by shutting down Binance without they're not and sorry, not shutting down, just forcing them into compliance, that there won't be if there is nothing to take it to take its place right away, You really do stifle the industry in a large way, right

00:17:42:22 - 00:17:57:00
Bennett Tomlin
think your allusion to the Darkweb marketplaces is quite telling there. And I'm thinking specifically of the benefits the Alphabay seizure had and the Department of Justice's ability to prosecute other cases that led to revealing

00:17:57:00 - 00:18:10:17
Bennett Tomlin
Razzlekhan and Dutch that led to Bitzlato being taken out that contributed to Binance his indictment and it contributed to a bunch of other smaller firms down the way.

00:18:10:19 - 00:18:36:02
Bennett Tomlin
I hope people remember that the vast majority of cryptocurrency blockchains are pseudonymous at best, and because of their public nature, as soon as that pseudonym is revealed, it's permanently revealed. And so like the US government, after they seized Alphabay were able to use the records of Alphabay to de anonymize a bunch of other actors on the blockchain.

00:18:36:04 - 00:19:04:09
Bennett Tomlin
Similarly, when they seize any other entity, they gain new information that gets fed into their chain analysis programs, which makes it possible for them to identify a larger and larger subset of addresses. This is why it's important when you hear like Tether's onboarding the FBI and the Secret Service. Binance is installing a monitor that gets to see every financial transaction and all historical records to determine like what SARs should have been filed and things like that.

00:19:04:11 - 00:19:35:20
Bennett Tomlin
That means suddenly the the government has information and this massive quantity of addresses that interacted with Binance, interacted with tether, which means they get a much better map of the current state of the cryptocurrency ecosystem. And it means bad actors going forward need to be really careful with their OPSEC to make sure they don't make pull in funds from an address which was incidentally doxxed because of an interaction with Binance a couple of years ago or something right?

00:19:35:22 - 00:19:45:18
Bennett Tomlin
And like that is the compounding effect of these government seizures and some of these things is it increases the government's ability to effectively surveil the various blockchains.

00:19:45:18 - 00:20:00:07
Cas Piancey
this is a point you brought up when we were talking about tether as well, where you said they onboarded the FBI and the Secret Service and that by doing so, they are essentially granting them some form of access to stuff that the general public doesn't have access to

00:20:00:07 - 00:20:09:12
Cas Piancey
and why they're it would be wise for cryptocurrency advocates and people in the industry to reflect on that.

00:20:09:12 - 00:20:11:22
Cas Piancey
And perhaps worry about it a little bit.

00:20:11:22 - 00:20:25:18
Cas Piancey
I brought up Liberty Reserve and Silk Road, but the other comparison that we could easily make is Bitfinex having to deal with all of these regulators falling into compliance. Right? And yeah, they lost customers. It's not like they've gone away, but they lost customers.

00:20:25:20 - 00:20:51:07
Cas Piancey
People left their exchange and then they went to BitMEX, which had already been functional and, and working at that time. And so a lot of the customers then went to BitMEX. BitMEX has to get into compliance. Those customers now go to Binance. Well, now they're Binance. Binance has to fall into compliance. I think it's just too easy to spin up an exchange and not have to do compliance for it to just go away.

00:20:51:07 - 00:21:20:06
Cas Piancey
Like it's much more difficult to both create and garner a large audience for something like Silk Road than it is for a cryptocurrency exchange where you could pretty much buy a white label, white label exchange on the market for whatever kind of cheap numbers you need. Hire a staff for relatively cheap of not that many people. If you don't have to do that much compliance, you really don't have that many staff members on board.

00:21:20:08 - 00:21:36:08
Cas Piancey
And then if people hear about it and you get traction, boom, like it just seems like it's just too easy to start to to make this. It's almost impossible to stop, in my opinion, for another large exchange to eventually take over

00:21:36:08 - 00:22:01:23
Bennett Tomlin
maybe. Like I think we have seen some new kind of constricting some of that, right? Like Binance had quietly become one of like the top new white label providers for a lot of new exchanges spinning up. Right. And so they're not going to be able to as easily fulfill that capacity anymore or there will be trade offs involved in people who want a white label using Binance.

00:22:02:01 - 00:22:25:12
Bennett Tomlin
Many of the kind of payment processors like Crypto Capital Corp, one of their initial selling points, is that you'd be able to like use their white label exchange tied directly into like their payment rails and have an exchange set up like days later. Right. And other payment providers have tried kind of similar pitches and many of those payment providers are no longer.

00:22:25:14 - 00:22:53:08
Bennett Tomlin
And the first solution you then say is okay, then they'll just be stablecoin exchanges, right? They'll be white label stablecoin exchanges. And yeah, that works. But like the the more layers, the more difficult it is to onboard people, the less substantial those exchanges become. And this also gets into kind of a question of what was Binance as volume?

00:22:53:09 - 00:23:26:22
Bennett Tomlin
Was the majority of it legitimate? Was this legitimate volume driven by retail traders interested in speculation? Was this bad actors interested in trying to clean, dirty funds? What was the primary draw and what would allow that to be replicated? Because you're right, it is relatively easy to spin up a white label exchange and list every shitcoin ERC20 and trade it just against tether or TrueUSD if you want.

00:23:27:00 - 00:23:35:12
Bennett Tomlin
But that I think has become somewhat less appealing to a lot of traders. And if that's all you want,

00:23:35:12 - 00:24:04:01
Bennett Tomlin
because to get the stablecoin you already need to be on a centralized exchange, generally or have cryptocurrency. And so if you're already on Coinbase and you're if you're a new shitcoin trader and now Coinbase lists a whole bunch of shit coins, are you really going to be like, it's worth me sending this over to LTX in order to trade this other shitcoin that Coinbase doesn't list.

00:24:04:03 - 00:24:31:01
Bennett Tomlin
Maybe, but like I also feel like defi uniswap pancakeswap send swap whatever swap is used on your particular chain or corner of degen world that fulfills some of that kind of like raw degen. Like I feel like it kind of there's less space for Binance because the raw degens end up just on defi and the people not smart enough to end up in defi end up on coinbase.

00:24:31:01 - 00:24:34:15
Cas Piancey
do you think that's maybe the answer, though, then?

00:24:34:15 - 00:24:58:08
Cas Piancey
Like, do you think that there's a place where one of these decentralized, whether it's uniswap or one of these other decentralized exchanges, creates a platform that is easy enough to access for the average person? Could that be the future? Is that like actually where the next big exchanges are? And if so, how would the government try to stop something like that?

00:24:58:11 - 00:25:22:12
Bennett Tomlin
I mean, I would say that the government would try to stop it the way they kind of over did with Uniswap right is you go to Uniswap Labs and you say, Yeah, if you guys are going to host the frontend for this now you're going to change your token list and remove these tokens. We don't like. And the counter to that, assuming defi actually works, is alternative front ends.

00:25:22:12 - 00:25:26:16
Bennett Tomlin
Are people running their own front ends or distributing their own token this or whatever?

00:25:26:16 - 00:25:38:03
Bennett Tomlin
the people who are looking for the convenient thing are going to end up in the more centralized locations because the advantage of centralized locations is that you can make it easier, simpler, more straightforward.

00:25:38:09 - 00:26:03:07
Bennett Tomlin
And so the government just needs to progressively target some of those things. And again, you can kind of squeeze it a little bit here, right? You put the pressure on Coinbase to delist a bunch of things. You limit what Coinbase can advertise and you cut off the number of people who enter that part of the funnel. You pressure uniswap and anyone else with front ends you can kind of reach to add in these token lists and you make people have to go out of their way to get some of these other tokens.

00:26:03:09 - 00:26:21:00
Bennett Tomlin
And like at a certain level, there's no point in really trying to eradicate it because like it's kind of like online poker. The people who were still doing it. At a certain point, the effort required to stop them was disproportional to the harm they were causing to others. Right?

00:26:21:00 - 00:26:22:04
Cas Piancey
Yeah, I think that's a great point.

00:26:22:04 - 00:26:31:03
Cas Piancey
been interesting to see this play out because it's so much different than FTC's. It's so much different really than than even BitMEX or Bitfinex.

00:26:31:03 - 00:26:46:07
Cas Piancey
but it does sort of feel like seasoned Binance's are, are really getting off pretty easy. And I suspect like, I mean, you know, CC is going to walk away from this still a billionaire still with his house in order.

00:26:46:09 - 00:26:56:03
Cas Piancey
and still he's going to be able to obviously influence the industry as soon as he walks out of prison again. and I assume they'll spin up a new exchange when he gets out.

00:26:56:03 - 00:27:10:03
Cas Piancey
it feels like the government took a pretty easy w instead of trying for a much harder W but I, but I do I do appreciate your perspective on that at this point.

00:27:10:04 - 00:27:17:22
Cas Piancey
Doing this could truly stifle or a lot of the bad actors in cryptocurrency in general.

00:27:17:22 - 00:27:24:19
Bennett Tomlin
And to be clear, I don't I don't know fully that I buy their justification like I know that is their justification.

00:27:24:19 - 00:27:46:14
Bennett Tomlin
And I can like figure out the steps that convince them it's true in their head. But like at a certain point and we discussed this, I think in the example of Paul Polar Rue, maybe in the best case we discussed this and that at a certain point you have the top of the food chain. Stop trying to flip, stop trying to get more.

00:27:46:17 - 00:28:09:02
Bennett Tomlin
You've identified the top person. You're now flipping down the chain at smaller actors because you can get a few more of them. Focus, focus. You've got it right there. Paul Le Roux is sitting in front of you right the fuck. Now Changpeng Zhao is right there in front of you. Prosecute the case you have instead of trying to set up a dozen other ones, you know.

00:28:09:04 - 00:28:13:23
Bennett Tomlin
But listen, I'm not a prosecutor. I'm shooting off the cuff. Whatever.

00:28:13:23 - 00:28:26:20
Cas Piancey
yeah, we're just assholes talking on a podcast and I think that's that is actually the correct take. You know, we are not lawyers and the idea we could easily like why are you just prosecute Binance and get CZ like yeah okay.

00:28:26:20 - 00:28:29:01
Cas Piancey
It's easy for us to say that it's a it's a tough job.

00:28:29:01 - 00:28:51:15
Cas Piancey
Come here, Come here. You're going to help me with this if you want. Once you have to help me. Come here. Come here. You got to help me. Come in. Come here. I'm trying to help me out. Okay? If you want to be Cas Coyne, if she wants to be Cas Quincy, if she wants to be Cas Coyne, CEO she's got to do a little bit of work.

00:28:51:15 - 00:28:52:21
Cas Piancey
It's not just all sleeping

00:28:52:21 - 00:28:58:06
Bennett Tomlin
Who really pulls who really pulls the strings at, gets between them.

00:28:58:06 - 00:29:12:03
Cas Piancey
looking at the CAS coin CEO right now. I'm trying to get her to agree to an interview. But you know what? Forget it. Forget it. All right, Cas, Clean. Cas. Coming to CEO isn't up for the. We are going to do an AMA, but forget it.

00:29:12:03 - 00:29:18:13
Bennett Tomlin
Burrito comes from the John Ludovic, of course. Vanderbilt School of CEO. Not the Polo Order. We know. It's cool.

00:29:18:15 - 00:29:19:19
Bennett Tomlin
See you.

00:29:19:19 - 00:29:24:21
Cas Piancey
CC. She is not tweet, tweet, tweeting things out and doing AMA. Okay, enough, enough.

←
→

2 responses to “Episode 146 – Binance and Changpeng Zhao Indicted: End of an Era”

Leave a reply to Big Brother surveillance dystopia is now reality at Binance Cancel reply