Check the Reuters investigative pieces on CZ and Binance from 2022. They had plenty to fine him with before SBF's testimony.

I actually can't believe he didn't get jail time given the severity of what was uncovered.

> Lim also acknowledged in February 2020 that some of Binance’s customers, including those from Russia, were involved in illegal activities, according to the complaint. Lim wrote in a chat message about those trades: “Like come on. They are here for crime.” Money Laundering Reporting Officer at Binance responded at the time, “we see the bad, but we close 2 eyes.”

https://archive.is/Q8uu3

Reminds me of my account manager at PayPal when I was running a TV torrent tracker. "We both know what you're doing, just never tell me what you're doing, OK?"

Probably the information that they (Binance) will share is really valuable to US.

Could we make a connection about Binance, and now Kraken prosecution with what happened after 9/11 where US pressed countries such as Switzerland to remove bank secrets? [1]

[1] https://www.cnbc.com/2023/03/24/swiss-claim-the-us-banking-c....

Why would these fines go to debtors of a private institution? I believe DOJ fines typically get deposited into the US Treasury.

There is a restitution process for victims of Federal crimes. One may make a case that the victims of SBF & CZ's malfeasance may be eligible for restitution. IANAL.

Correct, I don't know why this is the top comment when it's so wrong.

> SBF decided to testify against CZ to try to save his own ass, giving justice dept and sec something to fine CZ with.

Is this conjecture?

Looks like it, and also seems like BS.

SBF was convicted ~2 weeks ago and a Section 35B (federal cooperation and substantial assistance) doesn't go through that quickly, unless SBF started cooperating against CZ before his conviction.

And it sure didn't seem like SBF was interested in cooperating in any way pre-conviction.

he has infinite supply of money to pay any fine, i dont really understand the fine amount, whats the porpouse of it, u either force them to destroy the whole exchange or just try to make their complete reputation go down but this looks like the govt getting some pocket money and letting them keep doing nasty things overseas and thats it?

that's what fines are for.

most people criticize fines as a mere check for the offender belonging to some moneyed elite and nothing else.

fines are not replacement for civil law. if anyone think they were wronged, that's the only way. not a magically proactive government becoming their patents.

Isn't it better to just go after the scammers and fraudsters as soon as possible?

Otherwise somebody else will be left "holding the bag" eventually (and it will be a larger bag).

I might be old-fashioned but these fines and charges, to be clear, are for ACTUAL wrong-doing, you know, MONEY LAUNDERING. That's greedy-bad-guy stuff. It's not arbitrary or simply a matter of "avoiding drama".

It would have failed eventually. FTX was fundamentally unstable.

Rumor is that FTX is not that awful financially right now, because of their Anthropic investment.

... I mean right now maybe, OTOH that space is as volatile as Crypto was 13ish months ago.

If I was a bag holder in FTX I'd be absolutely on my knees praying for a piece of Anthropic as a substitute.

The Anthropic investment is completely illiquid. It was liquidity issues that crashed FTX originally.

TL;DR: they might have assets but they were and are still "awful financially"

I think they're also fundamentally insolvent even with the anthropic investment

Everything fails eventually.

Pretty great example of Hacker News when the top comment is "They should have done more crime but in a different way."

As long as those who are affected by some kind of loss are (reasonably) made whole, most legal systems won't give a flying f..k about anything.

Tort/civil lawsuits are about being "made whole." Criminal lawsuits are not because they represent crimes against the state/society.

> Tort/civil lawsuits are about being "made whole."

Only at the “modelling a cow as a perfectly thermoconducting sphere” level of analysis.

Actual damages and preliminary injunctions to preserve a situation remediable by damages are about that, other parts of what happens in civil cases are often not. E.g., punitive damages are, as the name suggests, punitive, not compensatory.

I'm unsure I follow your "modeling as a cow" analogy. Usually, that's used to show the model does not adequately reflect reality. But that doesn't hold in tort cases. Compensatory damages are the majority, by a considerable margin. According to DOJ data[1]:

- Punitive damages were awarded in only 5% of trials where the plaintiff won

- It was lower for tort cases (3%) and higher for contract cases (8%)

- It is lower in product liability and medical cases (1% each)

Those findings show that the punitive damages awarded are both relatively rare and modest. A "spherical cow model" based on compensatory damages is probably still a very good model.

[1] https://www.centerjd.org/content/fact-sheet-punitive-damages...

Thing is, prosecutors don't want to waste their time. Someone who made whole those who lost money or other assets (or at least made a credible effort to do so) gets lower priority and lower sentencing over someone who just sharts on laws.

The state also brings civil actions that are not about damages or being made whole. See the ongoing business fraud case in NY against Trump.

That one is because Trump didn't make whole anyone across his career. Not the IRS, not his creditors, not the countless people he and his various enterprises stiffed (e.g. the tradespeople who worked on the casinos [1][2]).

There's so many people who Trump and his various enterprises left stuck with sometimes very huge bills that it's a miracle he didn't get dinged years ago. And that is why Trump is being on the receiving end of the stick at the moment... he forgot one crucial point: never make too many enemies in life because eventually they will team up to get their revenge on you.

[1] https://eu.northjersey.com/story/news/columnists/mike-kelly/...

[2] https://eu.usatoday.com/story/news/politics/elections/2016/0...

The big question is whether he will plead guilty and/or the judge will convict him.

In US, you can be rich and get away with a lot of crime and crookedness.

If Trump does go to prison, that will make quite the news.

Putin and Xinping will be laughing because they have such a strong hold on their countries, them going to jail is unthinkable.

> Putin and Xinping will be laughing because they have such a strong hold on their countries, them going to jail is unthinkable.

That’s one way to look at it. Another way is to note that they’ve done a real good job of limiting their potential future options. They get to remain in power, or be exiled and live in hiding, or be dead? They’re unlikely to resign and get to live a quiet retirement, just as they’re unlikely to be jailed by their opponents?

Martin Shkreli did that, and the feds still arrested him.

He annoyed politicians. Free country, huh?

If by "annoyed politicians" you mean "bait and switched AIDS patients".

He wasn't arrested for raising the price of his drugs, though. He was arrested for financial fraud, but none of his victims actually lost money. Very odd case.

https://web.archive.org/web/20170710014221/https://www.washi...

Securities fraud is a criminal charge. It's not about someone receiving relief from some injury like a civil case. You can be charged criminally even everyone ends up better off; it's a crime against the state.

Think about this: I hijack an airplane full of people but all I do is get them to their destination faster. Everyone is better off (i.e., no material injury occurred) but I assume you'd still think I should be charged, no?

FWIW- Madoff used the same excuse that "nobody actually lost money." According to him, none of the principal was lost, it was just unrealized gains. Most people still think he should have been charged with fraud.

He said the price increase would not affect patients directly- just insurance (can’t verify).

But he would do livestreams where he said anyone without insurance or that had insurance that wouldn’t cover it could DM him and he would take care of it for them. One of my online friends was able to get the medication this way.

He upset the democratic establishment when he chose to stalk Clinton’s daughter on YouTube

This is why Ross Ulbricht was doomed from the second he did that Forbes interview as “Dread Pirate Roberts” and dared the US government to come get him.

You can do a lot of illegal things and get away with it, but questioning the US government’s ability is just asking to be made an example of.

There are limited law enforcement resources and no doubt Silk Road would have gotten a bit longer reprieve, but once he poked the bear, you damn well know they said “I don’t care what it costs, I want this guy in prison for the rest of his life”.

So much for freedom and rule of law

I believe Martin Shkrelli would disagree

I think that (sadly) the key distinction in the American justice system has to do with how easily it is to justify your prosecution to the public. If you're wildly popular, you're probably able to get away with quite a lot. If you're wildly unpopular, it's probably pretty easy to get a conviction on any number of things.

define justice...

Justice, in its broadest sense, is the concept that individuals are to be treated in a manner that is equitable and fair. A society in which justice has been achieved would be one in which individuals receive what they "deserve"

So, what do they deserve? It's up to a panel of peers to determine. Peers, mind you, that are representative of the society you live in.

So in a sense, public outcry and court of public opinion can sway personal opinions on what is just and fair and determine what people deserve. I find the entire system malleable and ripe for corruption.

What system, in your world, is not malleable and ripe for corruption? In your world democracy would be the most malleable and corrupt while autocracy would be the least given the boundaries you laid out.

In autocratic regimes justice is usually perverted from the top (comrade district secretary calls district judge to affect proceedings - in USSR it was informally known as "phone law"), in democracies you usually need to involve wider public pressure to achieve similar results. It's definitely makes democracy better, because to sway public opinion is costlier, more visible and at least partially deliberative endeavor. But legal justice is not moral justice in any political system, and there are always ways to at least nudge legal system in a way that is more convenient for some forces.

That's why juries suck. For some reason we pretend that even a random group of people can't have shared biases. Especially when there's a lack of evidence, it opens a jury up to judging someone based on their race, gender, appearance etc and I've seen it happen.

Considering an idea without agreeing with it might be one of the better modern definitions of curiosity.

Considering an idea is about taking everything into account. The part where it’s illegal or morally reprehensible is essential to the discussion. Also if not communicated like here it can be understood as an opinion.

I do not assume ill-intent of the other curious people here, and I think if you do, you're not following the guidelines (take the most charitable interpretation of what someone writes).

I’m not assuming ill-intent, I’m talking about the idea. Stating something is wrong or illegal seems essential to the discussion. It’s like if someone said “I should rob a bank”, I sure hope saying it’s illegal will be taken into account in their curiosity.

Free and unrestrained insight into the ruthless and the sociopath minds is half the reason I come here.

Ah, thank you for putting words to describe why my gut feeling of morbid curiousity applies to HN like it does for air crash investigations.

I don't think doing less crime was ever on the table for these guys.

CZ is the one who pretty much orchestrated the FTX collapse. Chickens, home to roost, etc.

I've seen analyses showing even without CZ it was just a matter of time before the house of cards collapsed.

"It's only when the tide goes out that you see who's swimming naked". The tide was going out even without CZ's actions. And FTX was swimming naked to the bone.

Oh FTX was definitely a house of cards, but maybe they could have played funny money games, got more investement, and otherwise stayed solvent until their Antropic bets paid off mayyyybe. But CZ definitely swept their legs out, purely out of spite.

Agreed, it's maybe-maybe not. This is like playing what-if. There's no A/B testing with history.

What is not the case is that it would have clearly gone one way or the other.

FTX has a ~$8B hole.

It was far cheaper for CZ to pay the $4.3B fine.

Depends if buying FTX would have stabilized the price of their FTT coin. That would have filled in some of the hole. And then CZ wouldn't have had to step down

So FTX would still be in the hole, and CZ is likely in the hole.

Sounds like kicking the can down the road to me. That won't end well.

SBF commits fraud and loses $8b, CZ pleads guilty and pays $4.3B fine and loses access to US market. I don't know why so many people think the crypto space is legit and this is just a temporary setback.

Kicking the can down the road is the name of the game in ponzi schemes

Or nobody should have ever bought unsecured crypto on sketchy new exchanges... That would have saved the entire loss perhaps?

Pretty much every major marketing push and normalized on social media (Including NFTs and influencer Culture) ends up being a massive scam.

It worries me that no one sees the trend and holds social companies & people involved properly accountable for this form of crowdsourced theft.

The government wouldn’t give that fine to FTX investors and customers. They keep it for themselves. Making FTX investors and customers whole is FTX’s job, not the govt.

What the government agencies and police do with money they collect will surprise many, and in many cases might be considered corrupt. I can assure you that the very last possible thing that will happen is that the money will be used to make anyone whole.