The U.S. Department of Justice (DOJ) recently revealed charges against Binance Holdings Limited, one of the leading crypto exchanges worldwide. The DOJ reached a groundbreaking $4.316 billion settlement with Binance for noncompliance with anti-money laundering (AML) laws. Surprisingly, despite Binance's claim to exclude U.S. users in 2019, the firm continued to provide market access to elite American patrons, who contributed approximately one-third of the company's trading revenue.
Decoding the Whales of Binance in the Court Filing
The repercussions of the seismic DOJ settlement with Binance are still being felt in the crypto sphere. The settlement, which also involved the U.S. Treasury and Commodity Futures Trading Commission (CFTC), amounted to $4.3 billion. The allegations against Binance included knowingly evading registration as a money services business and violating AML laws and the Bank Secrecy Act, among other regulations.
One notable aspect highlighted in the charges was Binance's practice of maintaining a significant number of high-value customers from the U.S., even after the establishment of Binance US and the claim that the exchange no longer served U.S. customers. The court documents revealed that these VIP clients played a substantial role in boosting the exchange's revenue.
The court filing stated, "Although Binance announced it would block U.S. users and establish a separate exchange that would serve the U.S. market, Binance retained a substantial portion of its user base on Binance.com, with a particular focus on U.S.-based VIPs, including trading firms that made markets on Binance.com."
11,000 VIP Whales Contributed to 70% of Binance's Revenue in 2019
According to the court documents, which were originally sealed on November 14, 2023, Binance's CEO Changpeng Zhao (CZ) was informed in June 2019 that the exchange had a formidable roster of 3,500 American VIP users. These VIP clients, consisting of 11,000 whale clients, represented a staggering 70% of Binance's trading volume. U.S. VIPs alone accounted for approximately one-third of this highly lucrative bracket.
Upon receiving this information, CZ and three other executives at Binance began devising strategies to secretly retain U.S.-based VIP users through direct phone communication. An unnamed informant mentioned in the court filing revealed that Binance executives classified American patrons as "miscategorized" and had an internal "VIP handling" guidebook to train employees on managing these high-spending individuals. The guidebook reportedly instructed privileged users to open accounts without any "U.S. documentation" to ensure user confidentiality. By 2020, the DOJ stated that Binance still had a significant number of U.S.-based clients, though they were referred to as "unknown."
The KYC Controversy and the Power of Crypto Whales
In August 2021, Binance publicly stated that all users complied with know-your-customer (KYC) regulations. However, the DOJ revealed that a higher tier of customers who did not submit KYC documentation were given special treatment until May 2022. During this period, the DOJ claims that Binance did not actively monitor transactions on the platform. Although the court document does not disclose the identities of the VIPs or market makers, it sheds light on the immense power and influence that crypto whales wield in the industry.
The revelation of Binance's American VIP customers and their significant contribution to the exchange's revenue has brought attention to the practices of the crypto giant. The DOJ settlement with Binance highlights the importance of compliance with AML laws and regulations in the crypto industry. As the industry continues to evolve, it is crucial for exchanges and market participants to uphold transparency and accountability.
What are your thoughts on Binance's VIP customers? Share your opinions in the comments section below.
Frequently Asked Questions
Can the government take your gold?
Because you have it, the government can't take it. It's yours, and you earned it by working hard. It belongs entirely to you. This rule could be broken by exceptions. You can lose your gold if you have been convicted for fraud against the federal governments. Also, if you owe taxes to the IRS, you can lose your precious metals. However, if you do not pay your taxes, you can still keep your gold even though it is considered property of the United States Government.
Can I buy gold with my self-directed IRA?
However, gold can only be purchased with your self-directed IRA. To do so, you must first open a brokerage account at TD Ameritrade. If you already have a retirement account, funds can be transferred to it.
The IRS allows individuals up to $5.500 annually ($6,500 if you are married and filing jointly). This can be contributed to a traditional IRA. Individuals can contribute up $1,000 per annum ($2,000 if they are married and jointly) directly to a Roth IRA.
You should consider buying physical gold bullion if you decide to invest in it. Futures contracts are financial instruments that are based on gold's price. These financial instruments allow you to speculate about future prices without actually owning the metal. Physical bullion, however, is real gold and silver bars that you can hold in your hand.
What are the benefits of a Gold IRA?
An Individual Retirement Account (IRA) is the best way to put money towards retirement. You can withdraw it at any time, but it is tax-deferred. You have total control over how much each year you take out. There are many types available. Some are better suited to college savings. Others are intended for investors seeking higher returns. Roth IRAs let individuals contribute after age 591/2 and pay tax on any earnings at retirement. However, once they begin withdrawing funds, these earnings are not taxed again. This account is a good option if you plan to retire early.
The gold IRA allows you to invest in different asset classes, which is similar to other IRAs. Unlike a regular IRA which requires taxes to be paid on gains as you wait to withdraw them, a IRA with gold allows you to invest in multiple asset classes. For people who would rather invest than spend their money, gold IRA accounts are a good option.
Another benefit to owning IRA gold is the ability to withdraw automatically. That means you won't have to think about making deposits every month. To make sure you don't miss any payments, you can also set up direct deductions.
Finally, gold is one the most secure investment options available. Because it isn't tied to any particular country its value tends be steady. Even in economic turmoil, gold prices tends to remain relatively stable. Gold is a good option for protecting your savings from inflation.
What precious metals could you invest in to retire?
The best precious metal investments are gold and silver. Both are easy to sell and can be bought easily. If you want to diversify your portfolio, you should consider adding them to your list.
Gold: Gold is one of man's oldest forms of currency. It is also extremely safe and stable. It is a good way for wealth preservation during uncertain times.
Silver: Silver has always been popular among investors. It's a good choice for those who want to avoid volatility. Silver tends instead to go up than down, which is unlike gold.
Platinium is another precious metal that is becoming increasingly popular. Like gold and silver, it's very durable and resistant to corrosion. However, it's much more expensive than either of its counterparts.
Rhodium – Rhodium is used to make catalytic conversions. It is also used in jewelry-making. It is also quite affordable compared with other types of precious metals.
Palladium (or Palladium): Palladium can be compared to platinum, but is much more common. It's also much more affordable. This is why it has become a favourite among investors looking for precious metals.
Do you need to open a Precious Metal IRA
Before opening an IRA, it is important to understand that precious metals aren't covered by insurance. There are no ways to recover the money you lost in an investment. This includes any loss of investments from theft, fire, flood or other circumstances.
This type of loss can be avoided by investing in physical silver and gold coins. These items can be lost because they have real value and have been around for thousands years. You would probably get more if you sold them today than you paid when they were first created.
You should choose a reputable firm that offers competitive rates. It is also a smart idea to use a third-party trustee who will help you have access to your assets at all times.
Do not open an account unless you're ready to retire. Keep your eyes open for the future.
How do I open a Precious Metal IRA
It is important to decide if you would like an Individual Retirement Account (IRA). Once you have decided to open an Individual Retirement Account (IRA), you will need to complete Form 806. Next, fill out Form 5204. This will determine the type of IRA that you are eligible for. This form must be submitted within 60 days of the account opening. You can then start investing once you have this completed. You might also be able to contribute directly from the paycheck through payroll deduction.
If you opt for a Roth IRA, you must complete Form 8903. Otherwise, the process will look identical to an existing IRA.
To qualify for a precious-metals IRA, you'll need to meet some requirements. The IRS states that you must be at least 18 and have earned income. Your annual earnings cannot exceed $110,000 ($220,000 if you are married and file jointly) for any tax year. Additionally, you must make regular contributions. These rules apply regardless of whether you are contributing directly to your paychecks or through your employer.
You can use a precious-metals IRA to purchase gold, silver and palladium. But, you'll only be able to purchase physical bullion. This means you can't trade shares of stock and bonds.
You can also use your precious metallics IRA to invest in companies that deal with precious metals. This option may be offered by some IRA providers.
However, investing in precious metals via an IRA has two serious drawbacks. First, they are not as liquid or as easy to sell as stocks and bonds. This makes it harder to sell them when needed. They don't yield dividends like bonds and stocks. Therefore, you will lose money over time and not gain it.
How is gold taxed in an IRA?
The fair market value at the time of sale is what determines how much tax you pay on gold sales. Gold is not subject to tax when it's purchased. It's not considered income. If you decide to sell it later, there will be a taxable gain if its price rises.
Loans can be secured with gold. Lenders try to maximize the return on loans that you take against your assets. Selling gold is usually the best option. There's no guarantee that the lender will do this. They might just hold onto it. Or, they may decide to resell the item themselves. Either way, you lose potential profit.
To avoid losing money, only lend against gold if you intend to use it for collateral. If you don't plan to use it as collateral, it is better to let it be.
- Instead, the economy improved, stocks rebounded, and gold plunged, losing 28 percent of its value in 2013. (aarp.org)
- The price of gold jumped 131 percent from late 2007 to September 2011, when it hit a high of $1,921 an ounce, according to the World Gold Council. (aarp.org)
- This is a 15% margin that has shown no stable direction of growth but fluctuates seemingly at random. (smartasset.com)
- Contribution limits$6,000 (49 and under) $7,000 (50 and up)$6,000 (49 and under) $7,000 (50 and up)$58,000 or 25% of your annual compensation (whichever is smaller) (lendedu.com)
- If you accidentally make an improper transaction, the IRS will disallow it and count it as a withdrawal, so you would owe income tax on the item's value and, if you are younger than 59 ½, an additional 10% early withdrawal penalty. (forbes.com)
- Gold IRA: Add Some Sparkle To Your Retirement Nest Egg
- Understanding China's Evergrande Crisis – Forbes Advisor
- Saddam Hussein's InvasionHelped Uncage a Bear In 1991 – WSJ
- Are you interested in keeping gold in your IRA at-home? It's Not Exactly Lawful – WSJ
The best way to buy gold (or silver) online
To buy gold, you must first understand how it works. Gold is a precious metallic similar to Platinum. Because of its resistance to corrosion and durability, it is very rare. It's hard to use, so most people prefer buying jewelry made out of it to actual bars of gold.
Two types of gold coins are available today: the legal tender type and the bullion type. Legal tender coins can be used for circulation within a country. These coins usually come in denominations such $1, $5 and $10.
Bullion coins can only be used as investment currency. They increase in value due to inflation.
They aren’t exchangeable in any currency exchange. If a person purchases $100 worth of gold, 100 grams of the gold will be given to him/her. The $100 value is $100. For every dollar spent, the buyer gets 1 gram of Gold.
When you are looking to purchase gold, the next thing to know is where to get it. There are several options available if your goal is to purchase gold from a dealer. You can start by visiting your local coin shop. You can also go to a reputable website such as eBay. You can also look into buying gold online from private sellers.
Private sellers are individuals who offer to sell gold at retail or wholesale prices. Private sellers charge a 10% to 15% commission per transaction. You would receive less money from a private buyer than you would from a coin store or eBay. This option is often a great choice for investing gold as it allows you more control over its price.
Another way to buy gold is by investing in physical gold. You can store physical gold much more easily than you can with paper certificates. However, it still needs to be safe. Physical gold should be stored in an impenetrable container, such a vault and safety deposit box to ensure its safety.
A bank or pawnshop can help you buy gold. A bank will provide you with a loan that allows you to purchase the amount of gold you desire. Pawnshops are small establishments allowing customers to borrow money against items they bring. Banks often charge higher interest rates then pawnshops.
The final option is to ask someone to buy your gold! Selling gold is easy too. Set up a simple account with GoldMoney.com and you will start receiving payments instantly.
By: Jamie Redman
Title: Binance's American VIPs: Unlocking the Secrets of High-Net-Worth Influence Amid DOJ Settlement
Sourced From: news.bitcoin.com/binances-american-vips-a-revealing-look-at-high-net-worth-influence-amid-doj-settlement/
Published Date: Wed, 22 Nov 2023 19:00:42 +0000