I'm not defending Binance, rather, it feels like the SEC rhetoric went past the point where a fine is appropriate.
Unless they are only proposing it so they can't be accused of not giving them the same treatment that everyone else gets.
"If Binance and the DOJ agree on a deferred-prosecution-agreement, the Justice Department would file a criminal complaint against the company. The US would not go forward with a prosecution as long as the company meets prescribed conditions, which usually include paying a substantial penalty and agreeing to a detailed statement of facts outlining its wrongdoing. A process would be set up to monitor the company’s compliance."
Also there might be personal criminal charges against CZ:
"Negotiations between the Justice Department and Binance include the possibility that its founder Changpeng Zhao would face criminal charges in the US under an agreement to resolve the probe into alleged money laundering, bank fraud and sanctions violations, according to people familiar with the discussions.
"Zhao, also known as “CZ,” is residing in the United Arab Emirates, which doesn’t have an extradition treaty with the US, but that doesn’t prevent him from coming voluntarily."
LOL at the "coming voluntarily" part though...
It's not just the US. Spain is accusing Shakira of financial fraud (spending more than 183 days over a year from 2012 to 2014 in Spain --for she had a spanish lover--, without paying her taxes in Spain) and she had to pay something like 16 millions plus six months in jail but they recently settled on an additional 8 millions or something and no jail time.
I mean: it's not exactly the same but they still traded cash for part of the sentence.
P.S: Spain is also apparently now going after her for year 2018.
I would imagine that the US is not unique in either (1) making corporations liable for crime, or (2) having the principal sanction against the corporation itself for any crime be either monetary or a combination of monetary sanction and injunction or similar behavioral controls.
You can impose civil or criminal penalties on the directors, but the shareholders are also (perhaps rightly) punished when you impose fines.
A government can also seize a company's assets and redistribute them to recover costs, but in doing so you often dismantle the value.
[1] (At least not in the same way you can impose capital punishment on a human.)
If they did care, then paying (some amount) to get off scott free wouldn't be an option.
The current approach of allowing payola (like this) just encourages bad actors.
In the long run, I'd wager the US government will be getting information and services worth a good deal more than USD4Billion out of Binance and ancillary organizations.
Still, if you can make as much money as Binance has allegedly been making, and sure, sell out a few of your customers, but now you can keep all that money free and clear legally? That's a pretty good trade assuming you're not some privacy nut or anything.
As a bonus, the shadow side of the US government will probably be pretty keen on protecting you from any of your less savory customers. Just so they can keep the whole thing rolling as long as possible.
This could be a good outcome for Binance.
I wonder if the SEC/CFTC stuff will be resolved too. That's the deal BitMEX got but this case is way more substantial than just not registering as a money transmitter.
Just find something that can be rationalized as value and the US will play along
If you cant: straight to jail, stay there till the trial or take a horrible plea deal that ensures your incarceration but for theoretically less time than losing at trial
Did you miss the part where they're still wanting to criminally charge Zhao?
Hell if you're rich enough you get to enforce US laws in foreign nations. Reading the US trade office reports is seriously disgusting to me. "Stakeholders" this, "stakeholders" that.
Outside America. Which, like, seems fine.
Fun fact: many years ago I did run an online business and I did break laws in other countries that I never plan to go to. I never broke US law.
Depends on who is going against their financial controls. Obviously if you’re the right person, going around them is permitted. Just don’t be the wrong person going around them!
Most likely the exchange is making between $2-$4B in profit a year (With bull markets around $12-$14B a year). However, with such a small team and the team being paid is bUSD, i suspect most of their revenue is pure profit.
Also, Binance executives are tied to Tether ($87B market cap) with around $8-12B in profit per year, and BNB ($39B market cap) $600-$800M per year, makes it one of the most profitable companies in the world.
So although $80B came from no where (And the real number is closer to around $20B a year with a market cap of $110B, $4B is nothing for them.)
