Cryptocurrency derivatives are banned in the US, but traders don't care

Lucius

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Quote from: MartinsCoin on July 30, 2021, 12:16:50 PM

As reported by The Wall Street Journal, hundreds of Americans are trading cryptocurrency derivatives on offshore exchanges such as FTX and Binance.

This is really worrying news that will surely encourage the US administration to deal with them in a fast and efficient way Roll Eyes

However, this may have to wait a while until the problem of those involved in the sale and distribution of drugs and illegal weapons is resolved - and this could take a while. Forbidden fruit has always been the most appealing, so why is anyone surprised that some people work against the law - after all, not all laws are made to benefit the majority.

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Quote from: MartinsCoin on July 30, 2021, 12:32:44 PM

Quote from: Yogee on July 30, 2021, 12:27:00 PM

Binance and FTX will be releasing statements that they increased their effort to block US customers. That's what I'm expecting the articles to be published in the next hours or days so they won't get into more trouble with US regulators. Best of luck to VPN users hehe.

In practice, merchants are using virtual private networks (VPNs) designed to mask the country where they are based.

That is the common route. And if Binance is really serious on their efforts in blocking people from the US or other countries with similar law, they would really up the ante on their security measures and systems to block even VPN users to access and trade on their platform. But that isn't the case, as Binance is still earning money from these pseudo-banned users by allowing them to use the existing loopholes in the system.

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Quote from: just_Alice on July 30, 2021, 04:17:35 PM

Didn’t Binance register a separate exchange in the US that functions in accordance with the established regulations?

They did, though certain states are prohibited from using the site. I'm not sure about the derivatives part of this story--is this all about tax evasion? If it's not, there are legitimate ways for US residents to trade crypto derivatives (like Bakkt and the CME).

And yeah, anyone doing this sort of stuff illegally is just asking for trouble now that the Biden administration has taken an interest in off-shore tax shelters. Even if it's crypto we're talking about, any shenanigans is bound to be discovered sooner or later.

Quote from: Fortify on July 30, 2021, 01:56:56 PM

the IRS is one of the most punitive taxation organizations you'll find, along with extensive resources at their disposal.

That's true, but they're also fucking corrupt as hell, and I thought they had been de-fanged somewhat a couple of years ago after that scandal involving the Tea Party. I'm not wishing them any luck in any of their endeavors.

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Didn’t Binance register a separate exchange in the US that functions in accordance with the established regulations? Why don’t just people use that one instead rather than risk so much, tax evasion is a serious crime and the penalty isn’t worth the risk. Are taxes really that high?

Fortify

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Quote from: MartinsCoin on July 30, 2021, 12:16:50 PM

US cryptocurrency traders are bypassing the country's restrictions on trading Bitcoin, Dogecoin and other digital currency derivatives abroad. This is what a recent study released on Friday (30) revealed. As reported by The Wall Street Journal, hundreds of Americans are trading cryptocurrency derivatives on offshore exchanges such as FTX and Binance.

As others have said already, just because people are committing illegal activities abroad does not make it acceptable or mean that they won't eventually get caught. The US government has been able to wield enormous pressure on to all of the tax havens who have been sheltering tax evaders for decades and pretty much all of them have succumbed to information trading agreements on US citizens - nowhere is safe any longer, accept ironically companies created in certain US states like Delaware. All of those traders, whether they win or lose lots of money will eventually be caught if they're really engaged in financial trickery and the IRS is one of the most punitive taxation organizations you'll find, along with extensive resources at their disposal.

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Quote from: teosanru on July 30, 2021, 01:44:11 PM

Quote from: MartinsCoin on July 30, 2021, 12:16:50 PM

US cryptocurrency traders are bypassing the country's restrictions on trading Bitcoin, Dogecoin and other digital currency derivatives abroad. This is what a recent study released on Friday (30) revealed. As reported by The Wall Street Journal, hundreds of Americans are trading cryptocurrency derivatives on offshore exchanges such as FTX and Binance.

The kind of ties US and Binance are now sharing with each other, and the stage Binance is in(I have heard they are thinking of an IPO) Binance would try it's best to ensure no one is able to flag anything shady in their exchange. If such a thing is happening and it's in WSJ already, Binance will surely give a lot of its data to US about the customers who are doing this and this might land a lot of traders into deep trouble. Binance has recently been very cooperative with various sovereign states and I feel that expecting privacy from them is like a myth now. Traders must keep in mind that they are risking a lot of money by doing this. Even if you use VPNs I am pretty much sure it's not that difficult for Binance to find out the source of any account.

FTX commented on the case after the report was released and said it would restrict its procedures for blocking US users by identifying and removing.

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Quote from: MartinsCoin on July 30, 2021, 12:16:50 PM

US cryptocurrency traders are bypassing the country's restrictions on trading Bitcoin, Dogecoin and other digital currency derivatives abroad. This is what a recent study released on Friday (30) revealed. As reported by The Wall Street Journal, hundreds of Americans are trading cryptocurrency derivatives on offshore exchanges such as FTX and Binance.

The kind of ties US and Binance are now sharing with each other, and the stage Binance is in(I have heard they are thinking of an IPO) Binance would try it's best to ensure no one is able to flag anything shady in their exchange. If such a thing is happening and it's in WSJ already, Binance will surely give a lot of its data to US about the customers who are doing this and this might land a lot of traders into deep trouble. Binance has recently been very cooperative with various sovereign states and I feel that expecting privacy from them is like a myth now. Traders must keep in mind that they are risking a lot of money by doing this. Even if you use VPNs I am pretty much sure it's not that difficult for Binance to find out the source of any account.

MartinsCoin

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Quote from: Yogee on July 30, 2021, 12:27:00 PM

Binance and FTX will be releasing statements that they increased their effort to block US customers. That's what I'm expecting the articles to be published in the next hours or days so they won't get into more trouble with US regulators. Best of luck to VPN users hehe.

In practice, merchants are using virtual private networks (VPNs) designed to mask the country where they are based.

MartinsCoin

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Quote from: jackg on July 30, 2021, 12:20:01 PM

Is it actually legal for them to do that though? I don't think it's legal for individuals outside of the US to buy US stocks without them being held in trust in the US and I doubt this has been done with things like binance...

If it isn't legal, it's unlikely you'll have accurate data on how many are doing it too - perhaps some go off shore to buy it by going somewhere like Canada?

The report analyzed Twitter posts and was prepared by Inca Digital, a data company whose technology is used by the Commodity Futures Trading Commission (CFTC) for investigations and market surveillance.

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Binance and FTX will be releasing statements that they increased their effort to block US customers. That's what I'm expecting the articles to be published in the next hours or days so they won't get into more trouble with US regulators. Best of luck to VPN users hehe.

jackg

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Is it actually legal for them to do that though? I don't think it's legal for individuals outside of the US to buy US stocks without them being held in trust in the US and I doubt this has been done with things like binance...

If it isn't legal, it's unlikely you'll have accurate data on how many are doing it too - perhaps some go off shore to buy it by going somewhere like Canada?

MartinsCoin

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US cryptocurrency traders are bypassing the country's restrictions on trading Bitcoin, Dogecoin and other digital currency derivatives abroad. This is what a recent study released on Friday (30) revealed. As reported by The Wall Street Journal, hundreds of Americans are trading cryptocurrency derivatives on offshore exchanges such as FTX and Binance.

Topic: Cryptocurrency derivatives are banned in the US, but traders don't care (Read 114 times)