Another Crypto Exchange Founder Guilty - CZ's Charges Explained
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- Опубликовано: 19 май 2024
- Binance and its founder Chanpeng Zhao (CZ) have pleaded guilty to anti-money laundering charges. Let's dive into the case, and what it means for crypto.
This channel is for education purposes only and does not constitute financial advice - Richard is not responsible for investment actions taken by viewers. Please seek out a registered advisor if you require assistance (while Richard is a registered portfolio manager at WDS Investment Management, he does not provide advice through The Plain Bagel, which is not affiliated with his employer).
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Everyone wants de-centralizing until they get scammed and run to centralized establishments to go fix it. 😔
Only those of weak character do that. Decentralization forces personal accountability.
But the idea of decentralization, and what we today consider to be decentralization are separate matters.
The commitment to the idea and it's principal is static, but the idea of what it means today is dynamic.
Decentralization, as those who spend years on it will be unable to deny, is a moving target driven by the principal of removing risks presented by centralized points.
Ultimately the last (and ideally only) risk remaining for decentralized systems to work perfectly, is the individual or user.
Those of weak character will always blame others for their own wrongdoing as they always have.
No we really don't go running to the government for help. In fact they have not done a darn thing to help the average customer.
@@KyleLarson557Good luck with buying REAL goods and services with crypto
Binance IS a centralized establishment. That's one of the reasons why this is all possible
Well said.
I thought Binance was flouting know-your-client laws but if they were advising them on how to launder money I guess they *did* know their clients!
I mean if they want to make it an acronym 😂😂😂
This particular comment caught my eye and gave me a chuckle.
Why would you support the satanic socialist state who seeks to rob us all of our money. Chanpeng Zhao was helping people.
Disruption is the hallmark of the industry… in this case they disrupted policing. Disruption nonetheless though
GOLD
You know, it seems crazy. This currency designed to be unregulated and ‘free from government control and centralized banks’ is very popular among criminals? Who would have guessed that?
Strange. How do you track 100$ after you withdraw them from the bank?
Ah impossible?
Then how do you track 1 Bitcoin moving from wallet to wallet?
Through the Blockchain? Ah okay. So you can see from where, how much and to where the Bitcoin was sent? Damn. Sounds like a horrible idea for criminals to use.
@@AApyrofreakwell, you can try to track that $100 bill with cameras all around the cities, maybe less reliable but tbh it would be hard to spend money without consistent trips to some place or some guy that gets more money out of nowhere.
I still don't understand how crypto with it's centralised exchanges could be anonymous but I wouldn't call cash anonymous either, in both cases it's inconvenient to trace the money but it's possible
@@AApyrofreak in the crypto space their are money mixing protocols to get around just that.
@@AApyrofreakBelieve it or not, you need to provide the bank with sworn information about your income before opening an account with it. There you have.
@@Ihaveanamenowtaken It was an example.
How does criminals get paid again? Illegally. Ah I see.
Crypto in the last two years has basically been like finding out Juicero machines have wormed their way into every facet of worldwide government, business and industry, and then someone woke up and realized that they could squeeze the juice out of the bag by hand.
*Juicero*
Lmao, I remember that dumpster fire
😂😂😂
It's so bizarre how resistant crypto is against criticism on what it's actually useful for
I'm an IT guy in the finance industry and I have to take annual training about things like sanctions and reporting suspicious behavior.
Dear colleague i feel your pain 😂. What a drag
Before I retired. I was a tech writer and still had to take training every year on insider training, sexual harrasment, and document retention. Every year.
...and that an accepted business practice.. is one..Not yet tested in court..
@@manuelrapino5917it's not that hard rofl bozos.
Be careful, this is a scam comment , be careful
Fines make crime legal for the rich.
The cost of doing business.
Fines in general kinda are the poor person's punishment, rich people just pay it off while poor people might get into long term struggle because of it
Any crime you can get out of by paying a fine isn't a crime: it's just a really expensive hobby.
agree, the fine just becomes another cost of doing business to them.
har har capitalism bad
Flawed, not bad.@@rairaur2234
Crypto has just been spending the last 5-10 years speed running the history of finance scams, soon enough they (and regulation) will catchup to contemporary finance scams and we'll hear about it less.
It's still so easily accessible,i don't think people will learn in the near future
Hear about it less as in politicians get in on it and more money is involved so we hear less of it?
That's gonna age like milk
Might want to differentiate between crypto and bitcoin?
Speedrunning the same scams that were done with fiat money for decades...but somehow the dollar didnt get caught up as a "scam." Maybe because people and media cant differentiate the money from the platforms.
SBF punching air right now. He mad jealous CZ got off scott free
He literally didn't
Basically in the poor house now… sorry I mean poor mansion.
@@samsonsoturian6013 a 50 mill fine is nothing for cz and he still owns a large chunk of bnb and he's not likely to go to jail so it's virtually nothing
The chances are they had nothing solid enough on CZ and had to make a deal with him to get him to come clean. Binance probably isn't hurting from this at all.
How you watch this video and come to the conclusion that CZ and SBF did the same thing is beyond me when in this case depositors money hasn't been messed with, did you watch the video at all?
Almost like all crypto is always a scam. 🤔
How’d you come to that conclusion?
I mean realistically everything is a scam. A painting being worth hundreds of millions is only worth that because we agree it is. A digital "token" being worth what crypto is, is only worth that because people agree it is. Billionaires aren't actually worth billions of dollars because if they sold all their stock, the stock would plummet and be worth significantly less. It's all just an illusion and we agree certain people should hold power over others through dollars. Eventually people will wake up and realize how worthless dollars actually are.
@@Ibloop Probably because virtually every major company involved with crypto has either had criminals at the helm or has been shown to be a house of cards. Plus you know, all the rug pulls.
All state fiat currencies are also scams. At least some cryptocurrencies are truly backed by gold.
Always has been.
weird. HSBC did the same thing, yet none of theirs went to jail, and all they had to pay was a $1.9 billion fine.
then years late they came back and did the same thing and paid a larger fine, but still no one went to jail.
yeah he comes across a bit naive when he goes in on binance for funding terrorism when a lot of the companies he would be looking at are involved in very shady things (e.g. nestle, HSBC, JP's linked to Epstein, etc)
Yep. People hate on crypto when the mainstream do worse including lauded social activism, but they just do so legally
With very strict requirement to enhance their aml policies, which had to be audited until it was green lighted. That was for laundering mexican drug cartel funds in some branches. Bitfinance on the other hand helped launder and one could argue facilitate terrorist financing as plain bagel said. Most likely they too will be enforced to have strict compliance program.
@@TheThreatenedSwanpeople hate on crypto AND banks, etc. It's just that crypto so far served no purpose for the common people, while banks etc did provide useful service, even when trying to screw you over from time to time
@@tomlxyztell that to al the people that made money on crypto
4.3 billion fine! HSBC only paid 1.9 billion fine for laundering cartel's money back in 2012...
Yeah, my fascination with Holmes and SBF is just how much their scans consisted of mainstream behavior that should be condemned in every instance, not just when they're adjacent to other fraudulent behavior. CZ did what other bankers do, yet people want to pretend this is different because crypto was involved.
inflation lol
@@MatthewStinarthey are racist cuz hes chinese and nicer to sbf cuz jews are a protected class
@@NeostormXLMAXjust turn your Internet off and touch some grass. Maybe talk to real people.
@@carl7534hard to digest but bros spitting fax
Always love the videos!
A big takeaway that I hope people understand is the difference between exchanges and blockchain itself. Both have different purposes.
This was predictable, wasn't it?
I told my crytpo bro coworker it was a short matter of time for Binance to be found illegal or an outright fraud last week, so I timed it right
Very much so
Yet everyone is stunned
Yes. I was waiting for it
Nah, what's predictable is CZ will be arrested again
Next thing you know, someone's going to put a shovel in the ground and find dirt down there.
I am mildly shocked by all of this
How can I subscribe twice? This channel is honestly too good! Thanks for taking your time explaining all market news AS they happen🙏. Keep up the great work!!!
Your Content Stands Out In A Refreshing Way! I Truly Appreciate The Absence Of Background Music In Your Videos, As It Allows Your Message And Personality To Shine Through Without Distractions. Keep Up The Great Work!
The best take on crypto news come from people outside crypto. Thanks for your unbiased opinion.
I hope the plea deal involves some secret provisions where Binance helps law enforcement track these illicit funds. That would explain why the company is allowed to keep going with a fine and a slap on CZ's wrist.
Most likely. Basically they will allow the FBI, NSA and whoever else wants access to all their data on their clients.
@@zaco-km3su...or, they already did, and only then got the plea deal formally offered.
Dream on. The US government is not that competent.
Either that or FBI is setting them up to twist their arm about cooperating when they inevitably keep doing the same exact things. Or the gov't just isn't that competent, yeah, OK.
The US government has zero control of their business.
Thanks for the great video! Very insightful as always. I wanted to comment on the end of the video, touching on the matter of Crypto currencies in general and the lack of regulation making it hard to establish as a safe environment. Crypto currencies, by now, are nothing extremly new. They have been around for a while, yet there is a great lack of regulation. Where would you say is that coming from? Was is regulators that overlocked development and were "late to the party"? Would love to hear your insights on that :)
"Funds are safu"
No, funds are SAFU which is more better.
"Have fun staying poor, lol"
they are though lol
Fundus are still save when the universe restarts
Funds are in my safe, safe for me not for you
great video and love the comment section, what a great community you buildt !
As an AML professional of over 10 years, that internal email made me laugh 😂. The amount of time and effort everyday to protect customers and then you have Binance activley encouraging criminal behaviour.
hey Richard, thx for the news
I can’t even exactly explain why, but I saw this coming after he started openly criticizing SBF and Kevin O’Leary
Once I heard CZ throw SBF under the bus with the attempted merger I thought "strange you'd throw him to the wolves when you're probably doing the same thing and this'll make you much more scrutinized."
@@vhateverliemaybe SBF acted to reckless when it comes to covering up, so CZ tried to distance to not get caught for the same
@@tomlxyz true, and it probably gave him time to start cleaning up his act so when he does get caught most of the damage is mitigated
@@vhateverlieI mean, to be fair, running a laundering business on the side is far less problematic than appropriating customer funds to cover your own investment pyramid scheme. What happened with FTX was akin to a bank run due to insolvency, what Binance was doing is not too different to what HSBC was doing with running a laundering business on the side. Binance isn't going to collapse over this any time soon, just as HSBC didn't collapse.
@@vhateverlieFTX and Binance is not doing same thing.
FTX takes and stole them. Binance just didn't stopped people from moving crypto
The humor is still top notched, love it.
You're a wholesome guy, keep up the good work!
For a product that suppose to be free of government regulations. Their company's guarantee a "Trust Me Bro"
To be more fair than I really should be, Citibank also got itself in trouble for similar AML deficiencies a while back.
Its a very common thing, not a big deal. Just the mafia (US government) coming for their cut.
"Yeah man I helped fund Al-Qaeda"
"Oh. And you're not going to prison?"
"Nope lol."
Tiktokers: Maybe crypto isn't so bad after all
Ye but like, not with his own money. Do you go after the phone company because a bank robber planned out a robbery on the phone with his co-conspirators?
Excellent, informative video.
simple and informative thank you
The waters are muddy, deep and fowl.. Woah!
As a retired financial advisor in NZ i still Luv your commentaries. The penalties for these very serious securities law breaches seem very punitive. Where is the regulator lesson for others.
And you get better looking as you age.😅
Amazing writing ! No shortage of wit despite the information
I must compliment you, for clear speech patterns. As I had my browser set at 1,25, and even though you speak rather fast - it was a breeze to follow.
Rich, I had to do my KYC AML annual training the other day. Your joke about "accepting of everyone" had me out of my chair
Is it just me, or CZ looks like Megamind?
He does😂😂😂😂😂😂😂😂😅😅, and CZ also looks like certain DZ/DBZ characters, e.g.: Krillin and unfortunately, Piccolo Jr😂😂😂😂😂😅
Carolyn Ellison looks like Dobby.
Glad you covered this, a lot you creators are surprisingly silent with this case
When they announced they were puling out of Canada, I sold everything and transferred off their platform as I had BNB there, figured if Binance went down BNB would be worthless anyways. All my crypto is now on my own wallets (most of it was before though just the BNB wasn't)
@@anon_148 I didn't think they were going down until they pulled out of Canada. That really signaled to me that they weren't serous about being a legal exchange since Canada actually has some regulation around crypto. That being said, I bought it in late 2017 / early 2018, so I think i did pretty well 😆
Dear Santa: All I want for Christmas is to send this video back in time to November 2021
They used customers money and then backed it with his own coin. The same as the FTX
at least he was smart enough to plea.
Regulators make it very hard and expensive be complaint, this is especially true if you are a startup in an emerging finance technology.
Binance and CZ were treated just like any USA bank.
Yeah, and people on here forgot about Deutsche Bank and HSBC really quickly!
After we sacrificed all our heroes from the last cycle, halving around the corner, it‘s time for a another bull market. Few.
Cz: oh no.... Anyways
this is very good news for regulated exchanges like LCX.
At what point would you no longer consider bitcoin to be “new”? It’s nearly 15 years old!
When dude being charged millions and he worth billions…
Just a reminder, Zhao is pronounced like 'Jao' 🙂
Had a friend who always invested with a crooked financial advisor. "But, he makes me money..." was his reasoning. But, at what moral cost?
Got a Crypto Ad just before this video.
That crypto and Twitter are both seeing foibles, since they’re both dependant on social media such as Twitter, there’s more to come!
The wisest thought that is in everyone's minds today is to invest in different income flows that do not depend on the government, especially with the current economic crisis around the world. This is still a good time to invest in gold, silver and digital currencies (BTC, ETH.... stock,silver and gold)
CZ's tweet didn't start the FTX drama, it was more of a nail in the coffin.
They were already almost defaulting on their debt because their lenders were really skeptical of their ability to pay in the future and started calling loans.
And in general FTX credibility to the public was already going down, CZ's tweet just sped it up greatly
I hope the 'safeties' never come into crypto. Because the more scammers focus on crypto the less they'll be focusing on the rest of finance.
I am not cynical to crypto, but I have definitely been skeptical of the market since it took off in the mainstream. My risk tolerance is very low and I fully appreciate that my returns will be low as well, but I’m really not comfortable with something so unregulated and seemingly untraceable. I do find it fascinating to watch and I think it could be a viable model for relatively safe investments in the future. Right now, there are too many unknowns for me and the market is too volatile. I would need some laws on the books that put in place better guardrails before testing the waters.
Slightly unfair to put CZ and SBF in the same video thumbnail Richard, two vastly different class of "criminals" here
Also, you could argue his goal of reaching compliance in 2023 should include restitution for past "violations", so actually it's going very well!
yeah lmao, not even remotely close
How are they vastly different? There's evidence in the other lawsuit that CZ was also commingling customer funds, it just wasn't part of this case. The only real difference is one didn't plead out and got fucked, and the next guy took the deal.
@@salkdhfpoahergpoahre1534 ftx went bankrupt and lost everyone their money, binance got a speeding ticket. how are they not vastly different?
@@salkdhfpoahergpoahre1534 Regardless of what he is "accused" of, this video is about who he's been "found guilty of". SBF was found guilty of commingling funds, bribery, cooking the books, fraud, almost complete lack of appropriate record keeping and a lot of other scummy behaviour. Binance, and by extension CZ, has been found guilty of an essentially "paperwork" violation, and failing to provide adequate (prehaps even encouraging?) money laundering oversight and / or prevention. This does not affect his normal users, their money and assets have not been lost or affected. Binance/he has NOT be found guilty of fraud, inappropriate book keeping, bribery, or misappropriation of user funds and has in general been a force for good in terms of adoption and access for crypto in general over the past few years.
A good point was made that Binance might fail simply due to the money launders leaving them.
Makes sense. Internal communication showed that they wouldn’t have been this big in the first place if they didn’t actively marketed for money launderers. They themselves knew what they got into.
the justice department couldn't, in good conscience, put a heavy charge on a banker that was honest* to their clients.
*in relative terms
Looks like CZ only turned out to be a Cubic Zirconia
I am so glad I never got involved in crypto.
This is insane. Shut these crypto shams down.
I thought for sure this guy would disappear from public forever. Probably to his secret hideout hidden in a volcano.
All these crypto bros in shambles is great too see.
I finally understand the 4chan expression of "coping and seething", because that's what they are doing in the comments
real crypto people don't hold their coins on exchange. plus in this case, it's not like anyone on binance lost money
@lmaolol9357 What? No one in this comment section is coping or seething, though? So far literally nothing has come of this in terms of crypto value changes binance still works btc went up 2 percent today. Literally if you're an average coin holder youd have no idea this even happend
CZ being found guilty is the least surprising headline I've seen all week. If anything, Mr. Fivehead's time was way overdue. All crypto is a scam.
Mr 5 head 😅
People think that binance is the first to do this and it’s particular to crypto but Credit Lyonnaise did the same and many banks have been sanctioned and closed down for AML concerns.
Are cryptobros those who shout that decentralised finance is the way forward but then give their fiat to a centralised exchange in return for crypto currency?
Could you do a video explaining what the purpose of a crypto exchange is? I mean, what are people trading? Are they just buying and selling different crypto coins? And if crypto coins cannot be used for anything other than speculation and money laundering, what legitimate purpose would a trading platform have other than facilitating Ponzi schemes and money laundering? Thanks (I’m asking Coffeezilla the same question.)
Its speculation. We all throw money in the same pot and then some coins get bought and others sold. So some grow in valuee and others decrease. If you guessed which will grow you earn money. Additionaly you can launder your illegal money. Its not mich different from real banks except politicians dont get a cut. Also potentialy you could avoid politicians devaluing your money by printing more of it and spending it but speculative part means you could loose even more of it but then again also get more.
@@kristijangrgic9841 Thank you.
The main reason why CZ isn't going to jail is because he's still rich and hasn't caused other rich people to lose billions of dollars... yet.
@@anon_148 that we know of, anyway
@@anon_148 not that we know of lol, I wouldn't be wholly surprised if he first cleaned up his own house before trying to (rightly) call out SBF
@@devilex121bullshit binance never had any problems with funds before ftx even got popular
Line goes down
If he didn't criticize SBF, we probably wouldn't be talking about this lmao. This is just the perfect time for Blackrock to enter the market
Refreshing to hear someone call out "illegally occupied regions of Ukraine" without hesitation.
There is no unique registration for crypto in the US but saying there is no registrations/licensing requirements at all is provably false. The various agencies have released multiple guidance documents and statements basically saying if your financial transactions match existing financial transactions then you register with the relevant regulator; eg if your a crypto-derivatives exchange, register with the derivatives regulator, if you provide money transmission you need an MTL license. The industry promotes the myth that there is no clear regulation because they don’t like the rules not because the rules don’t exist.
Thier are guide line suggestions on how they should be registered but no hard laws.
The "guidance" (not law) from Gensler has been "come talk to us."
Why say that? Why not just hand over the written law of the land? The SEC wants these conversations behind closed doors.
@@KaiSosceles the SEC isn't an enforcement agency, they can only file civil cases or refer them to other federal agencies like the DoJ.
You know it was only a slap of the wrist when you plead guilty paid the fine and say I will just take a break and have a vacation. And will just do it all over again when the dust settles.
If there are no ways to properly value assets except pure speculation, then it is a scam. It is also worse if it is not regulated.
The DOJ does worst things than binance
Things are changing …
where do coinbase uphold and etherium and others stand and how do people exchange these things for real money can you make a video to explain this all thank you.
Gultiy of doing the exact same thing as many of the banks out there. However, unlike the banks, (so far) he has kept the customers funds safe.
The new CEO was previously the 'Global Head of Regional Markets'.....🤔
Global Head... Regional....
Self custody of your crypto has always been the best way.
The Sackler family PERPETRATED, not PERPETUATED, the opioid epidemic in the US.
I would say that since actually both are true, using either word would be acceptable.
@@DukemusMaximus Both aren't true; the Sacklers didn't perpetuate it; they perpetrated it; this Canuck just doesn't speak English v well
@@weksauce Actually, they both ARE true. They perpetrated it with the initial development of Oxycodone and its sales model; they perpetuated it by consistently raising dosages and changing marketing to respond to criticisms. The Sacklers initiated an ongoing crime, lasting for years, and were involved from beginning to end; thus they both perpetrated and perpetuated.
Is CZ going to jail? If not, why would he care?
Assuming that there's truly no misappropriation of customer funds or any other form of fraud. If this is all CZ and Binance is charged with, then all it demonstrates is that cryptocurrency's so-called "decentralized payment system" is working as intended.
In the end it's still a crime to help facilitate illegal financing, so I won't try to justify it if he's proven guilty. I'm not a crypto guy myself but I'm glad to see that CZ is sticking to cryptocurrency's principles to the very end.
It's actually about centralising decentral currency from the central banks of centrality and centralisation bad except when it's your money in the hands of scams.
under rated comment
I have watched many videos on crypto and this is the first one I watched twice - loved it
Ben Stein voice
" this is so surprising to me, he seemed like a stand-up guy"
Shock, horror, surprise.
I declare that all crypto bro comments need to include a declaration regarding their NFT portfolio so their comments can at least be entertaining to read.
A lot more money laundering was done with USD via traditional banks such as HSBC and JPM
no one will care about this as everybody is biased towards TradFi and don't see value in Crypto. Only the natives know and understand why we keep staying here.
But it’s centralized and safe
This guy is biased since he worked for hsbc
@@Denver_____ it's precisely centralization makes it unsafe. Binance and all crypto exchanges are centralized
For a moment i thought even the plain bagel is guilty.
Be involved in cryptocurrency in literally any way at all without committing felonies Challenge (Impossible):
Don't register as a money transmitter if you aren't one.
Who would have guessed an industry based on greed-driven speculation in black box funny money is run by crooks? I mean what are the odds? Who could have possibly seen this coming?
.
.
.
🙋🏻♂️
How dare you imply elontaintdogemoon isn't the financial system of the future and the one you savior of mankind
This will only make crypto currency markets and exchanges go outside of the US.
Then the US will have no say at all in how it will work.
Fun fact: the rest of the world buys and deals in crypto more than the US does.
This is very unusual since the US financial markets tend to dwarf the rest of the world's.
The US will continue to have a say as long as people need a fiat on/off ramp to USD.
@@JMR0303 First of all, all exchanges out there have different crypto > fiat currency ramps.
Second of all, buying crypto outside of the US is a lot, lot easier.
Third of all, the rest of the world is bigger than the US crypto market.
(This is very peculiar because usually US financial markets dwarf the rest of the world's)
Fourth of all, crypto is and will be used for things the US government disapproves of, whether you or others like it or not.
Example: Russia going around financial embargoes by using crypto payment systems instead of SWIFT.
Cope, seethe and dilate.
What do you mean a tweet isn’t a guarantee our funds are safe?!?!
If we cannot trust digital currencies created to be completely anonymous and untraceable; exactly what can we trust???
Thanks for the positive feedback! Despite cryptocurrencies being around for a while, there's a notable lack of regulation. What do you think caused this delay? Were regulators slow to catch up, or are there other reasons? Share your thoughts!
If CZ doesnt misuse user money they will be fine
To me, the difference between FTX/SBF on the one hand and Binance/CZ on the other hand is that one is like Bernie Madoff and the other one is like (the worst aspects of) UBS.
I’m going to start going by DC so I can get a CEO crypto gig
It turned out... funds weren't safe?!? I guess?? 🤷🏼♂️
Where was it stated that funds aren't safe?
lol
thanks for the video. are you learning about forex too? i just learned forex trading from the nfc community.