Binance reveals plans to elude U.S. authorities amid fear of prosecution: Report

Crypto exchange giant Binance in focus this morning following a report from the Wall Street Journal that amid the fear of prosecution Binance had set out on a plan to neutralize US authorities. Yahoo Finances David Hollerith has more on this story joins us now David what are some of the details here. Crypto exchange giant Binance in focus this morning following a report from the Wall Street Journal that amid the fear of prosecution Binance had set out on a plan to neutralize US authorities. Yahoo Finances David Hollerith has more on this story joins us now David what are some of the details here. Yeah so Jared, just to take a step back. So by its internationals the world's largest crypto exchange and by its us is much smaller us regulated crypto exchange. Yeah so Jared, just to take a step back.

So by its internationals the world's largest crypto exchange and by its us is much smaller us regulated crypto exchange. There's been a long running discussion about the relationship between these two firms, and that's become notably a bigger deal. As critics have pointed out, in, since FTX has collapsed, there are a lot of similarities in terms of structure between the two firms. There's been a long running discussion about the relationship between these two firms, and that's become notably a bigger deal. As critics have pointed out, in, since FTX has collapsed, there are a lot of similarities in terms of structure between the two firms. So as we've reached a new boiling point on Friday actually in bankruptcy court. Voyager digital is trying to sell its assets to Binance us.

And notably the SEC, the FTC and several state regular securities regulators have actively been objecting and sort of the bankruptcy So as we've reached a new boiling point on Friday actually in bankruptcy court. Voyager digital is trying to sell its assets to Binance us. And notably the SEC, the FTC and several state regular securities regulators have actively been objecting and sort of the bankruptcy is trying to go through all this. So binding it to us licenses, the Binance brand and technologies but is technically a separate legal entity though it's nonetheless majority owned by Binance's founder and CEO CZ. is trying to go through all this. So binding it to us licenses, the Binance brand and technologies but is technically a separate legal entity though it's nonetheless majority owned by Binance's founder and CEO CZ. As far back as 2020, there's actually been reports about sort of a connection to this, and even documents that have shown that Binance at least at one point in time was thinking about trying to find a way to reach us investors without having to deal with us regulators.

As far back as 2020, there's actually been reports about sort of a connection to this, and even documents that have shown that Binance at least at one point in time was thinking about trying to find a way to reach us investors without having to deal with us regulators. So the Wall Street Journal story from the weekend drew from chat logs from Binance employees. And this provided further evidence that Binance for some time, you know, has been potentially trying to find ways to use Binance us to to reach us investors without having to deal with regulators. So the Wall Street Journal story from the weekend drew from chat logs from Binance employees. And this provided further evidence that Binance for some time, you know, has been potentially trying to find ways to use Binance us to to reach us investors without having to deal with regulators. And Reuters is also reported about this extensively and they've also drawn as was in the journal story they've drawn a connection to Merritt peak which is it was a once a market maker for Binance us. And Reuters is also reported about this extensively and they've also drawn as was in the journal story they've drawn a connection to Merritt peak which is it was a once a market maker for Binance us.

And Reuters is also owned by CZ Binance's CEO, but notably from this story I think what was pointed out was the fact that the SEC chair Gary Ginsler has was actually being recruited by Binance before he was chair of the agency when he was an MIT professor. And Reuters is also owned by CZ Binance's CEO, but notably from this story I think what was pointed out was the fact that the SEC chair Gary Ginsler has was actually being recruited by Binance before he was chair of the agency when he was an MIT professor. And that's notable as if we are to believe the chat logs from Binance employees, it indicated that he was generous and offering licensing strategies to the companies obviously this licensing agreement situation is, is the legal connection between the two firms. And that's notable as if we are to believe the chat logs from Binance employees, it indicated that he was generous and offering licensing strategies to the companies obviously this licensing agreement situation is, is the legal connection between the two firms. It's also notable as on Friday, CZ the founder actually did a Twitter Spaces AMA and he sort of brought some of this to the public's attention to saying that you know he had met it previous previously known Gary Ginsler, and that they had, you know, had a good report. It's also notable as on Friday, CZ the founder actually did a Twitter Spaces AMA and he sort of brought some of this to the public's attention to saying that you know he had met it previous previously known Gary Ginsler, and that they had, you know, had a good report. And he lectured for his MIT course so this all just makes the connection between what's going on right now with Binance US and the SEC that much more interesting.

It does and speaking of connections I mean as we talk about the interconnectedness of this crypto world. As we know one of the potential casualties that you've been watching is Silvergate. What can we expect to happen next with that sort of crypto focused bank. And he lectured for his MIT course so this all just makes the connection between what's going on right now with Binance US and the SEC that much more interesting. It does and speaking of connections I mean as we talk about the interconnectedness of this crypto world. As we know one of the potential casualties that you've been watching is Silvergate. What can we expect to happen next with that sort of crypto focused bank.

You know, so for Q for Silvergate fell into a situation which is they were less, less than well capitalized or sort of on the brink of being less than well capitalized. There's a leverage ratio that is watched closely by banking regulators and Silvergate was about 5.3% anything below 5% is a concern for regulators. You know, so for Q for Silvergate fell into a situation which is they were less, less than well capitalized or sort of on the brink of being less than well capitalized. There's a leverage ratio that is watched closely by banking regulators and Silvergate was about 5.3% anything below 5% is a concern for regulators. And Silvergate's come out saying they're going to be late on their annual report losses look worse.

And obviously last week we saw the stock collapse by half between Thursday and Friday. So in this scenario Silvergate's a, it's a bank. It's a state chartered bank. And so it could go into something, which is receivership which for banks it's kind of like bankruptcy, not quite the same thing. And Silvergate's come out saying they're going to be late on their annual report losses look worse. And obviously last week we saw the stock collapse by half between Thursday and Friday. So in this scenario Silvergate's a, it's a bank.

It's a state chartered bank. And so it could go into something, which is receivership which for banks it's kind of like bankruptcy, not quite the same thing. And so we decided by either the California state regulator or the FDIC. And in either situation it would likely be the FDIC that sort of take the mantle there. So we'll be watching that but again that's that's a worst case scenario. And Silvergate has fallen. It's lost so many deposits in the last couple of days.

You know, we are definitely expecting something like this to happen. Yeah, most definitely will count on you to keep watching it. Thanks so much David. Appreciate it. And so we decided by either the California state regulator or the FDIC. And in either situation it would likely be the FDIC that sort of take the mantle there. So we'll be watching that but again that's that's a worst case scenario.

And Silvergate has fallen. It's lost so many deposits in the last couple of days. You know, we are definitely expecting something like this to happen. Yeah, most definitely will count on you to keep watching it. Thanks so much David. Appreciate it.

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