Is this the same Bitfinex whose CFO said they "bank like criminals?" The same Bitfinex who just lost $850M in a bank seizure by law enforcement? The same Bitfinex whose CEO is a ghost that nobody has ever seen before? The same Bitfinex whose longtime CSO (Phil Potter) resigned as regulatory scrutiny, allegations of criminal market manipulation and other legal problems piled up last year?

WEX.nz may have been on the extreme end of things regarding their lawless mentality, but Bitfinex is very close behind them. Anyone with significant funds on deposit at Bitfinex or Tether is surely playing with fire!

I'm sorry that happened.

Kraken has forum reps that occasionally respond in this thread. You probably won't get much information outside the ticket system, though.

Do you mind disclosing what form of 2FA your father was using? I believe Kraken still allows users to use a second "static password" as 2FA rather than true 2FA -- something you have, like TOTP authentication on a phone. If he was using this method, it's possible he had both of his passwords compromised by a social engineering attack or hack. That would give the attacker all they needed to change 2FA and withdraw his funds.

It's backed by a company called SideShift AI.


Same thing here. SideShift AI is a centralized company holding custody of Bitcoin deposits. This is the same thing as Bitgo issuing WBTC on Ethereum or Tether issuing USDT on Bitcoin. These are just tokens backed by a centralized custodian. You need to trust that they're actually redeemable.

That seems unlikely to me. It's probably one of the reasons altcoins and tokens are dumping -- because there will be less capital and demand on Binance to buy them up.

I'd say the Bitcoin market is just rising in spite of the Binance news.

That's how Binance is trying to frame it to save face, but if you read between the lines and look at what Binance's competitors are doing -- namely, cutting US customers off from securities markets and IEOs -- it's clearly about pressure from US regulators. They would never segregate markets if they didn't have to.

Binance is just doing what's in its best interest. If it carried on offering unregistered securities to US persons while dodging national securities exchange requirements -- requirements it can't possibly meet -- then enforcement actions like this would become increasingly likely.

The fact that Poloniex and Bittrex are both scrambling to comply with SEC requirements at the same time as Binance suggests the SEC is putting pressure on all of them to quickly make these changes.

What kind of attack are we talking about? I would be very surprised if there weren't government adversaries on the network, for the same reason they run TOR exit nodes. They're sniffing for network data like IP addresses to accompany their blockchain analysis efforts. They're working to identify our wallet clusters. The IRS is very interested in identifying our wallets, I'm sure.

If the US platform is anything like their Jersey platform, it'll be a total flop. US traders use Binance for the abundance of markets and lack of KYC. If the US site doesn't offer those things, nobody will use it.

People think this is just bad news for US traders, but it's also bad news for token markets. With US traders being increasingly fenced off from token markets, there will be less demand and liquidity for tokens. Maybe ICOs, IEOs and STOs will therefore take a back seat and the market will return to the good old days of pumping altcoins.

So, has he perjured himself then? As I understand it, he filed a sworn declaration that he didn't own or control W&K. Now it's been uncovered that he owned 50% and directed the company, or at least filed documents to that effect.

I'm not sure what the penalty for perjury is under Florida law, but it's up to five years imprisonment at the federal level.


That might explain why he can't access the private keys, but isn't the court just asking for public addresses? How can he claim to not have that information?

Apparently, this affects not just exchanges but all services and custodians who are party to cryptocurrency transactions. Does that mean Bitpay and other payment processors will be enforcing this? How about online and hosted wallets?

Changpeng Zhao said it's going to be a fiat-crypto exchange. It'll probably be more like Binance.je than Binance.com, but hopefully I'm wrong and there will still be lots of available markets for US traders.

I believe part of this has to do with offering security tokens not registered with the SEC, and Binance's unwillingness to register as a national securities exchange. Bittrex and Poloniex have made similar moves. It's possible that most markets will still be available on the .US domain, minus a few dozen of the obvious securities.

I hear what you're saying but to be fair, all of the G20 publicly pledged to enforce the FATF recommendations. There will likely be significant pressure on exchanges serving Europeans as well. We're already seeing significant pressure there from the last AML directive from the EU.

The FATF guidelines may be the metaphorical straw that broke the camel's back but Binance's move is deeper than that. Like Bittrex, they need to segregate their US clientele because of the multitude of unregistered securities markets on Binance.com. They've been operating as an unregistered securities exchange for years now and this is a show of good faith to become compliant. There's no doubt many less markets will be offered on the .US domain.

If anyone is interested, there is a bill in Congress that would help on that front. It was reintroduced two months ago. It would exempt lots of coins from securities laws, allow like-kind exchanges of digital assets, and make up to $600 in capital gains realized through buying goods/services tax exempt per year.

If you want to trade on platforms like BitMEX or Deribit, you can't be a US citizen. It's a violation of their terms of service:

My reading is the same as yours regarding the CFTC definition of "US person." It doesn't appear to extend to citizens, only residents.

There may be some issues with your desire to remain an American resident, though. How exactly are you planning to engage in swaps? Regarding point (vi) if it applies, due diligence on your counterparties may be required to ensure you aren't engaging with US persons.

The debate between proponents of low but perpetual inflation (like Monero) and those who favor a hard capped supply (like Bitcoin) will probably continue for decades. The jury is still out on that one.

But I think we can all agree that having a predictable supply and inflation rate combined with relative scarcity is vastly superior to the unpredictable supplies of fiat money or gold.

When it comes to money, the more information users have, the better. The transparency of money supply in cryptocurrencies like Bitcoin is unparalleled.

These guidelines will affect businesses -- exchanges, custodians, hedge funds and such. They won't affect peer-to-peer traders who aren't engaged in a business. If centralized exchanges and P2P marketplaces become an inconvenient privacy nightmare, that might provide real impetus for adoption of things like Bisq and Hodl Hodl.

I sure hope so, anyway.

I'm probably going to start P2P trading on the forum. With Localbitcoin's removal of cash trading, the cash market is dead for now. And with new FATF guidelines for exchange oversight coming out in about a week, the hammer might be coming down on exchanges who still allow trading without KYC. Most exchanges are probably about to go full Bitstamp, or worse.

If you don't keep separate wallets -- ones that are linked to your KYC profile at exchanges vs. ones that aren't -- start thinking about it now. Safeguard your privacy.

No exchange can be trusted. Full stop!


Yes, it's some kind of risk mitigation algorithm. Deposit/withdrawal patterns, login locations, who knows? But something is getting these accounts flagged and Coinbase obviously doesn't view the accounts as worth the risk. Gemini especially doesn't seem to like disclosing why they close accounts. I guess if they make their specific risk mitigation procedures public, people will start finding ways around them.

The money wasn't exactly "stolen." You can't use the withdrawal system through the API. Hackers probably used his account (and others) to pump altcoins they were already holding. The hackers could sell their altcoins at inflated prices, then withdraw bitcoins through their accounts.

There was a large scale attack of this kind on Binance last year. The hackers pumped the Viacoin market in an attempt to withdraw:


Those who had their accounts phished experienced losses because their bitcoins were used to buy VIA at inflated prices. When the market returned to normal, that VIA was worth very little.

There will probably be provisions to identify people who are structuring transactions to avoid reporting. For example, the Bank Secrecy Act obligates banks to file Suspicious Activity Reports where they suspect deposit structuring to avoid the $10,000 Currency Transaction Report threshold. We'll probably see something similar when the final FATF guidelines are released.

I don't think it'll drive away investors, but it could definitely change the nature of current trading practices. Some -- including Coinbase -- are speculating that these FATF guidelines will drive investors away from exchanges and back to peer-to-peer trading:


If he's right, it could be a double whammy for exchanges. Increased compliance costs and a smaller share of retail investors.