Binance HUMILIATED | Massive Crypto Arrest.

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바이낸스 CEO CZ의 규제 회피 의혹을 CNBC 보도를 근거로 제기하고, 코인베이스 규제 리스크와 재무 악화를 지적. 바이낸스의 BUSD 1억 달러 규모 BTC·ETH·BNB 전환이 매수 압력을 만들 수 있다고 언급. 비트코인·이더리움 등 코인 가격에 대해서는 급락 가능성이 낮다고 보면서도 패닉 위험을 경고.

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01. well folks we just had another big crypto arrest uh do Quan was interested in the month on his way to you guessed it Dubai and CNBC just released a massive hit piece on finance yikes let's talk about both of those so first of all duquan is the founder of Terra Luna which is a complete disaster that many say started the crypto collapse that we are now well enjoying dare I say some actually like that word enjoy because you see it as a by the dip opportunity on ethereum and BTC but Tara Luna's collapse led to the collapse of three arrows Capital which led to the cops of Voyager digital which led to the collapse of Celsius which led to the collapse of block five which led to the collapse of FTX it's all a connected disaster it was a Domino's a Domino's disaster not pizza disaster dominoes falling disaster so do Quan uh has been fleeing from South Korean prosecutors who have put out have basically been on a on a hunt for this guy and they finally found him because for some reason he actually thought it would be a good idea to try to get on a plane somehow he made it all the way to Montenegro which is in Southeastern Europe it's over there by like Croatia but instead of staying by land he decided to go into an airport and then he tried to use fake Costa Rican travel documents now there are allegations that he has siphoned billions of dollars from Terra Luna and is and should have plenty of money to actually get a high quality fake but apparently he couldn't get a good quality Costa Rican passport because he got caught immediately after he got caught the U.S justice department filed charges against him for fraud immediately as soon as he was caught more charges were filed against him now he was on his way to Dubai why do people go to Dubai when it comes to crypto which should be obvious Dubai in the United Arab Emirates does not have an extradition treaty he will go to Dubai for two reasons one low to no taxes number two no extradition treaties so if you're a wanted criminal in America because you made a lot of money by a fraud or otherwise where do you go you go to Dubai where is our Cayman island-based Finance located with CZ at the helm oh that's right Dubai yes also massive and many U.S security uh charges against uh uh CZ of Finance now every time I talk about CZ people uh get very defensive of CZ I have to give CZ credit they survived so far they had a massive run at the end of last year and so far they have survived we just to catch you up to speed have regularly found that a CZ likely commingles uh the funding and backstopping for multiple coins on the finance platform that is when they tell you hey all of our coins are backed one to one what they're really saying is hey if we have a pot of a billion dollars and then we have three different coins that all have a billion dollars of assets underneath them at any time if you take a snapshot they're backed one to one because the pot is backed one to one to this coin and then one to one to this one and then one to one to this one but they're never all backed in it in their entirety at the same time this is pretty obvious at this point so if you hear from finance that coins are back one to one probably not in fact probably the same assets that are sitting in quote seifu probably the same assets that are basically people's deposits that are backstopping multiple other points so if everything was facing some form of liquidation at the same time probably be running into some issues but I have to say they were able to survive what happened in December which is very very impressive now though what is CNBC telling us well CNBC has done pretty interesting deep dive into finance and this deep dive was actually associated with the binance angels now binance angels are apparently trained volunteers they are potentially paid for by binance but indirectly probably through a blockchain based wallets that make it very difficult to track how people are actually getting paid but Angels technically identify as Finance employees but binance calls them volunteers sort of like the community monitor moderators and what these Angels were caught doing by CNBC was basically in a Discord server of about 220 000 users they were basically teaching people how to get around the know your customer rules in China and after all uh well not just the know your customer rules I should say in America but also the fact that remember crypto has been banned in China since 27 17 the platforms have been banned since 2017 pretty much everything's been banned since 2021 in China uh and uh CNBC did an investigation looking into wait a second here what do we have here we have binance and these Finance Angels teaching people how to circumvent the Chinese rules for actually accessing uh binance they go as far as suggesting that Finance created an app that makes it easy for you to circumvent the rules so you could sign up for binance in China not only do they recommend using vpns based in the United States Singapore Hong Kong or even Taiwan to basically restrict or circumvent uh these Chinese fans but they also encourage you use overseas email addresses when you sign up such as Outlook Gmail or protonmail and if you end up choosing China as a place of residence just choose Taiwan while you sign up so you can sign up and then change it back to China afterwards so you look like you're in compliance and you never lied but you could sign up to get through the gate via these ways really what CNBC is alleging is that basically uh Finance set up this uh this this system of purposefully leaving holes in their system so they could tell China look we banned people see you can't sign up if you click you're from China but then leaving back doors open that they can then teach their Finance Angels how to teach people about and then after they teach their binance Angels about it they can tell the world about it so people could actually sign up for finance take a look at this this was the CNBC piece it was actually a phenomenal piece they mentioned here in multiple different places uh well they do multiple different interviews here with different people talking about look if I had an 8 out of 10 concern uh when it comes to finance for a regulatory perspective from a national security perspective I have a 10 out of 10 concern a lot of people just call this uh a fun right of course but but this this is real uh so so what what's happening Finance employees are explicitly prohibited from supporting users and circumventing their local laws that's okay because you call angels volunteers they're not employees they're just volunteers so you have to kind of read through the the uh read between the lines so to speak to see how they're talking basically out of both sides of their mouths but anyway Finance has stopped letting Chinese register with their mobile phone so you can't use a Chinese mobile phone uh and they're trying to ban people from being able to use vpns yet at the same time you have these angels in a Chinese Discord server saying basically use overseas emails use vpns so that way you could sign up for finance here in December 2022 a person with the handle Stella was identified as a finance Community manager explained how people can use a specialized VPN free domain name and download an app which appears to be specifically tailored for customers in mainland China to use binance Services CNBC was provided a link to this app from an email address with a finance.com domain a reporter was able download the app from a location within China without a VPN and register using a Chinese phone number so even though binance is telling you oh we don't take Chinese phone numbers apparently you're able to sign up with a Chinese phone numbers apparently all the back doors are basically wide open it's like doors closed in the front wide open in the back we'll show the Chinese government the front we'll let you in the back this is the kind of stuff that happens over at finance a reporter uh okay yeah let's see here uh the app is hosted on tencent which offers a cloud complete Computing software popular in China and offers the ability to purchase crypto uh using popular Chinese web apps like a Wii app or sorry WeChat and alipay uh now binance says we don't offer uh any kind of Chinese specific app there's only one official app sure there is only maybe one official app but you happen to offer another app that lets people backdoor the rules and then of course the Angels come to the defense as well saying we don't speak on behalf of Finance uh you know we're we're just volunteers you know so they've really been trained potentially in a process that takes as long as a year to train these angels uh and there's even a hiring page according to binance this page has since been deleted CNBC actually talks about that in a moment but apparently these angels go through a separate training process that takes up to a year and they're vetted trained and deployed across binance's Telegram and Discord groups operating under the supervision of Finance employees and they basically teach people how to circumvent rules so you could sign up in China uh saying things like oh don't worry your proof of residence is not required or if you're going to like submit Chinese identification documents don't worry just go ahead and claim to be from Taiwan use your Chinese identification and finance basically just will turn a blind eye we just won't look so that way we can bypass all this stuff Finance reiterated that angels are not employees it's just an ambassador program don't worry and angels are forbidden from sharing recommendations that are against our policies or law of course you're going to say that of course of course CZ calls this very Innovative yes it's very Innovative how to skirt the law uh and basically you have even been able in uh in Europe to use a Visa a debit card created by binance to let people turn their crypto into Fiat for use anywhere Visa declined to comment on the story uh anyway basically the story goes on and on and on CNBC asked binance to share commentary on this and as soon as CNBC asked Finance about these these this evidence CNBC had guess what happened hours after binance reported to CNBC messages appeared on Twitter suggesting that some customers Finance debit cards had been frozen why was my binance card Frozen and multiple of the websites that showed hiring pages and Discord servers were basically deleted so in other words CNBC just caught Finance red-handed again trying to skirt the law or dare I say not trying to script the law but actually skirting the law it's not a surprise that's what binance does that's what they've been doing that's why their owner is in Dubai so we can't be held subject to all the drama of Regulation and in some sense can you blame them I mean look at look at what coinbase is going through coinbase is going through our absolute freaking hell now let me give you this okay I I know some people are like oh Kevin you know just crypto fighting or whatever I actually think to some extent CZ is doing this because they realize if you try to do it the right way you're f it ain't gonna happen anyway look at what coinbase is going through coinbase is going through absolute hell and back to try to get just out of the sec's crosshairs they want a way to get registered with the SEC they want a way to legitimately work with the SEC and register their offerings but now the sac sends a Wells notice to coinbase and coinbase is like what the hell now we have to go through even more lawsuits and more problems now look I'm I'm not an apologist for coinbase maybe they're doing stuff wrong we don't know we'll find out when the actual investigation comes out right and I'm also not a straight apologist for the SEC although I do think that the SEC is as we all know the government is a bureaucratic organization their hands are probably Tied by Congress ultimately and then it's a bureaucracy not just within the SEC but also amongst all the other agencies commodity and future trading Association they don't have a consistent message between them and the SEC there's no coordination why well probably it's because Congress hasn't passed any kind of authorization for them to do anything now again I'm not trying to apologize for the SEC just saying like Congress needs to do something because until then coinbase is going to keep complaining about stuff like this look at this coinbase has this massive blog post from their legal counsel about how they got this Wells notice and how they've been trying that they're disappointed because the SEC has been working with them forever and coinbase says multiple times been Pro and spending millions of dollars trying to provide proposals to the SEC about registration all of which the SEC ultimately refuse to respond to honestly I don't think the sac wants to refuse to respond I think they look at all the proposals and they're like probably not a bad idea but guess what we can't do anything anyway because we don't have the Congressional authority to do it so so people at the SEC who probably pulling hair out of their heads going like we have to follow our our government mandated Mission uh which is what Congress tells us to do and an abiding Administration tell us to uh which is you know protect the banking system and and minimize fraud uh and so what's everyone cracking down on well crypto why because guess who was really exposed to crypto Signature Bank in New York and silvergate and guess what started the freaking banking crisis silvergate bank and signature so it's it's all correlating when you have banks that fail because of crypto and those bank failures lead to more bank failures like Silicon Valley bank and then Credit Suisse and now potentially Deutsche Bank well what do you have you have the government and people like you know Elizabeth Warren pounding their piss on the table going we need to protect the banking system well all you're doing is amplifying pressure on the SEC to put pressure on crypto and the more pressure goes on crypto the more the the crypto companies and the sec's crosshairs have to deal with this stuff that's why in my opinion coinbase has to deal with this because of the banking crisis CZ is registered or has binance registered in in confusing entities in the Cayman Islands and he lives in Dubai because it's quite frankly now he doesn't have to deal with all the regulation no that doesn't mean he's not a fraud he very well could be I don't think all of his assets are backed one to one I think their audits are bogus I would not have a diamond binance would I maybe use I mean I don't want to come across as endorsing I'm certainly not endorsing but if I was in a foreign country and I'm like look I'm just going to use binance to like fly coins and then take them off wall like off exchange rather and put them on a cold storage wallet maybe maybe that's my only choice to get involved in crypto right especially if I'm in a country where my currency is being devalued like if I'm in Turkey I'm like dude I'd rather get my paycheck and throw it all into crypto I'll use binance to throw all my money into crypto and I'll be a lot safer from the 60 inflation we're experiencing in Turkey so like if if you think about this can you really blame people can you really blame people for putting their money in crypto with all the inflation that's happening in the world especially in developing countries of course not can you really blame people for therefore using brokerages that enable them to do that of course not can you really blame the SEC when they're getting all this pressure from Congress because of the banking failure oh of course not who can you blame well you blame the people who were actually the frauds and who had terrible risk management procedures who led to these collapses like three arrows capital and FTX that's who you blame but guess what everybody else now has to deal with the consequences what you're basically doing is you're socializing the pain that's what's happening in crypto the pain is being socialized so everybody who's left in crypto who wasn't a scumbag has to deal with the leftover paying and the reality is that's probably coinbase because they're publicly registered with the SEC now being publicly registered doesn't mean the SEC approves of everything they're doing now they do say that in here that hey you let us list why did you let us list then well that means nothing that means nothing just because you you sent your documents for review with the SEC and the SEC is allowed to add commentary so you add more disclosures doesn't mean they approve of crypto fortunately that's also confusing though because like we said yesterday it's like how could you potentially punish us for something we don't even know is illegal or that you don't even know is illegal challenge but it's all because of the spanking crisis and this bureaucratic crisis that we're going through like I don't really think with the exception of people like sambang than freed and potentially seizing I I don't know I can't say that for sure about CZ but you can say that for sure about somebody like Sam Beckman freed I don't know that individually you know if you're involved in crypto or you have a crypto company or or whatever that that anyone is necessarily a fraud we can't say that right I think everybody's trying to do their best with the information they have available and we're just in a very frustrating time for the cryptos ecosystem and the stuff like the CNBC investigation doesn't help but then again like you know people in China obviously demand that just like there's a demand in a Black Market there's a reason why because people are trying to potentially get their money out of China China doesn't want to fly to Capital out of China because all the money's going over to like Hong Kong or Singapore because people like get me out of the CCP I don't know again I'm not trying to apologize for everybody here I'm just trying to provide perspective from every point of view the point of view of a citizen in China who's just trying to you know have control of their own money or the citizen of turkey who's trying not to get inflated to death or the bureaucrat working at the SEC who's legit trying to do their best but they can't because of all the red tape or the people in Congress who are like we should pass crypto regulation but dude Congress ain't gonna do jack over the next two years they ain't gonna do anything over the next two years you know I was in an interview yesterday uh news interview yesterday with a TV station and they're asking me what do you think is going to come out of this this Tick Tock Banning thing I'm like nothing congress is not going to do anything over the next two years there's too many politics involved now would I invest in coinbase right now hell no uh and that's not well I mean I went through their financials yesterday their financials are terrible their financials are absolutely horrible uh but beyond that the regulatory disaster that you would be walking into investing in coinbase right now it doesn't make sense it's not for me and look yes I have courses on building a rough you can learn about all of those you can even click to what my ETF is by going to meet kevin.com uh all of these things just go to me kevin.com you can see it it's not a secret it's all there but this information is not personalized Financial advice to you let me just put it this way though when I look at the coinbase fundamentals like we did yesterday I get a little nervous why do I get a little nervous well because their revenues collapsed the revenues nearly halved uh last year and their operating expenses nearly doubled last year why would I invest into that it's very very risky especially in this sort of regulatory regime now is that necessarily Fair uh uh that coinbase has to deal with sort of my criticism because of Regulation yes yes it is it's absolutely Fair because the reality is you as an investor have to be aware of the headaches that they have to go through now look I'll give them a positive note okay yes they have about four billion dollars at least of free cash that's fantastic then uh uh they are losing money right and their free cash flow is is not that great uh and uh insiders are selling coinbase uh but beyond that do you have to look at the actual fundamental business model they're just not that good these people have about a two-year Runway rate at about that 1.58 billion dollars in negative free cash flow they have uh but beyond that if you look over here you can see it their revenues went down 4.2 billion dollars while their expenses went up 1.7 billion dollars and you've got the regular service I can't touch them can't touch them with a 10-foot Pole right now so that's just my take now uh another take that I have which I think is really awesome uh is this take that now you can if you want to take advantage of check this out you can now sign up for the programs for building your wealth using a firm klarna or some of the other services so check those out we extend the coupon code to end today instead so that way you have an extra day check out buy now pay later before the prices go up on thos quick follow-up on this apparently binance is also now taking the move to dump essentially one billion dollars of B USD they're swapping it uh it for BTC eth and BNB uh some say this is uh because of one billion dollars of buying pressure uh which kind of or will create about one billion dollars of buying pressure which which some say might have led to a little bit of a temporary bump uh in in the prices of uh BTC and eth a lot of people have been seeing BTC pump and they're like why is this happening well potentially it was binance moving a billion dollars of busd into BTC Ethan BNB now uh why did he potentially pre-announce this that is why did CZ pre-announce this well some people think that uh binance pre-announcing this was potentially a post announcement designed to pump up their own uh stake so to speak after they made their purchases so think about this from a from sort of just a cynical point of view you look at this tweet you go given the changes in stable coins and Banks binance we'll convert the remaining of the one billion dollar Industry Recovery initiative funds from busd to Native crypto including BTC BNB and eth some fun movements will occur on chain today transparency okay right right some fun movements will occur today okay interesting uh either way the point is you literally have the potential for uh CZ to move markets with with his own chatting on Twitter uh and which makes sense because they have a lot of capital but what they've basically done is they've taken their cash backing and turned it into a now a market float coin which which is pretty pretty shocking they're going to convert a stable coin which is supposed to be one to one peg to the dollar so they say and turning it into BTC B and B and E it's the perfect sales pitch for the binance token it's the perfect sales pitch for eth and BTC it's the perfect amount of buying pressure to potentially get a rally moving whether whether they made the transaction right after the Tweet or at the tweet I mean we could look at the chain history it doesn't so much matter what matters is it's essentially diluting The Recovery Fund and creating more risk while creating an ad for binance kind of scary well at the same time uh you know some are saying maybe busd might come to an end since some of the uh since the issuing bank for busd is paxos and paxos is now getting sued by the SEC another sec lawsuit the supply of busd uh is is now uh basically only able to go down redemptions are open but you can't mint anymore busd coinbase disabled trading for bib USD so basically it's just like withdrawal only uh you have this this uh this idea that potentially uh Banks and institutions are trying to eliminate access uh to to these stable coins at all uh binance being one of the targets for them that's why paxos is probably getting sued remember that silvergate was the operator of the send Network The silvergate Exchange Network which ran 24 7 allowing those on and off ramps from crypto to dollars but crypto is basically getting debanked right now likely for political reasons but this debanking is also creating a d stable coinization I totally just made that up obviously but anyway it's interesting because the more you de-stable coin and the more you go to these free float currencies like Bitcoin and eth the more you actually potentially are vulnerable to a shock taking the whole system down no it's unlikely that you know Bitcoin and ethereum will actually go down entirely but you could lead to substantially more rapid panic in in the pricing of of these coins and assets so uh I don't know not not not great in my opinion not not great