It's incredible that American corruption can happen out in the open like this. And this isn't a uniquely Trump phenomena. Political pardons are an amazing thing, and they have been used by presidents for a long time now with extremely little scrutiny and no possibility for repercussions. The executive being able to overrule the judiciary is an absolutely jaw-dropping American institution. So much for checks and balances.
It's like there's a new social contract that states: it's not corruption if it's done in the open.
It's genuinely just this.
The rise of more grass-roots news sources (podcasts, memes, social media) also leads to tons of conspiracy theories, and mistrust that builds this idea of corruption being ubiquitous, just not out in the open. And yes, that happens, but this atmosphere magnifies it 10x.
So when someone like Trump does it out in the open, people are more likely to excuse it because "everybody is already doing it, at least this is out in the open".
The US has always been kind of scammy vs other western nations. In the movie when he says "have you no shame sir?", the answer typically is "nope".
The American dream is basically getting rich by scamming.
It didn’t use to be this way.
> The executive being able to overrule the judiciary is an absolutely jaw-dropping American institution.
No, its not, pardon and the closely linked power of clemency are common powers in representative democracies, often situated with the chief of state or the head of government (in the US, and other Presidential systems, the President is both), or sometimes the cabinet instead of the head of government in a parliamentary or semi-parliamentary system (in some cases, one or the other is assigned by law to a subordinate bureaucracy rather than being HoS/cabinet discretion, as is the case with pardon but not clemency in Canada.) It is generally more used in the US than other Western states, in part because the US has a much harsher criminal justice system with much longer sentences and much weaker provisions for relief other than executive pardon than other systems, but the power itself is common. [0]
The way it is used under Trump is wildly abnormal (for the US or the other representative democracies), though.
[0] see, e.g., https://www.seattletimes.com/nation-world/pardon-power-is-co... ; https://en.wikipedia.org/wiki/Pardon ; etc.
The president just prior to Trump pardoned his own son for crimes, and pre-emptively pardoned various other family members and political allies for any possible crimes before they could be prosecuted. Again, this is not new, this is ongoing open-air corruption, and Trump's escalation is the result of everyone being OK with it before now.
The son committed a crime and it could be argued it would have been a net benefit for democracy for him to accept the sentence.
It's also true his son was prosecuted politically, because few if any people go to jail for 4473 falsification.
It's also true that this is new and unprecedented.
I mean the pardon was the check and balance on the judiciary. However it's been turned into a tool for personal gain than a saving grace for mistakes of the federal crimes convictions. Both parties have pushed for this monarchic power to be expanded over time. I think it has a place but much like a lot of the federal government it needs a complete overhaul. The checks and balances system works alright but when a unitary party controls every branch there is no one to check that power.
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> And this isn't a uniquely Trump phenomena
Reminds of Biden pardoning his relatives without even saying for what. Just blanked pardon for everything. No democrat dropped his jaw.
> Reminds of Biden pardoning his relatives without even saying for what. Just blanked pardon for everything. No democrat dropped his jaw.
Everyone I talked to (more than 10, including myself) that I knew who voted for Biden was pissed, disappointed, even angry at his pardoning of Hunter.
That was incredibly corrupt and many Democrats in fact "dropped [their] jaws." And it's not the only instance of political corruption like this, either (Bill Clinton notoriously did something similar). Neither of these cases retroactively justify Trump pardoning anyone who sends him a few million dollars.
He was pretty explicit about the reason why.
He feared Trump would force the DOJ to prosecute them.
And, based on what Trump's done so far with the DOJ and his enemies, he was right to do so.
"My president is right to pardon whoever it likes, but not your president.. "
I think this whole pardoning thing should go away. It makes the presidents Kings.
If the goal of the pardon was to handle a corrupt Judicial branch, then a better answer would have been for the Executive branch to nominate someone for a pardon to the Legislative and require a 2/3 majority of the Legislative to approve.
But something like that would fly in the face of the "Unitary Executive" insanity and would (I suspect) require a constitutional amendment, which is no longer remotely feasible.
In no part of my post was there anything about my president vs. your president.
That's not the point of the comment.
A first comment said "without saying why". The second comment just says that this is blatantly not true, and that the rationale presented has been since confirmed as a very accurate prediction.
There's an argument the prosecution was political. See: https://x.com/balajis/status/1981423831572238856
Sorry, is this person comparing the rights and immunities of a head of a sovereign nation to those of a CEO of a company? I don't think France, as a sovereign country, is completely bound by US law whereas binance, when it is operating in US jurisdiction is. I'm not totally familiar with US finance law but I'm pretty sure a more fair comparison would be to other banks where KYC requirements and anti money laundering rules can be strict. From what I read about the prosecution, Binance ignored many warning signs from their own executives about the possibility and the lack of controls within their platform to comply with the law.
It's not much of an argument... he wasn't being held responsible for the actions of a few binance users, we was being held responsible for his own failure to implement compliance processes required by law.
The laws exist to restrict funding for countries under sanction, drug operations, terrorist organizations, etc.
We can argue about whether these laws are a good idea (either in general or in specific details), but you need to change the law, not just now follow it.
This is a terrible precedent... unless you're a con man, that is. (Balaji Srinivasan isn't stupid. I would guess he understands how real what he's arguing here is.)
balajis is personally invested in propping up the ecosystem.
How does pardoning CZ "prop up the ecosystem"?
It sends a clear message: Pay off Trump and you can ignore financial rules with impunity.
He had already served his sentance.
That message is still crystal clear, is it not?
The prosecution was not political lol, he went out of his way to support money laundering on the Binance platform. The reason he complied with the prosecution and pled guilty rather than try to fight it out in court was that they were able to produce a ton of evidence that he deliberately ignored regulators and regulations designed to prevent money laundering in order to make money off sanctioned groups and criminal organizations using the exchange as a way to circumvent KYC/AML laws. Please don't take what Balaji says about companies he invested in at face value.
It must really suck and be incredibly disheartening to be one of the folks who pursued this to a conviction.
The justifications for why the pardon is okay are ridiculously flimsy and I assumed that it was because they weren't really trying, but bewilderingly it does actually appear to have convinced some credulous people on Hacker News, so I suppose enough consent was manufactured that people think going out of your way to let money launderers use your platform is not a big deal? Maybe it's because people don't understand that typically the reason people launder money is because they committed major crimes to get that money and have no way to actually use it without getting caught.
For example if your crypto is the proceeds of ransomware, you're going to have a hard time cashing out without using something like Monero (which effectively has no offramps) without going through an exchange that knows perfectly well that you're trying to touch tainted goods. Exchanges like Binance that just don't bother to check who their customers are when they withdraw cash for such assets are just as critical to the ransomware plague as any security bug or social engineering issue. It's one of the reasons that pre-crypto, even though ransomware was technically feasible, it was never able to grow into a large-scale operation--no offramps. But hey maybe the official stance of CZ supporters is now that ransomware is good, actually, and if you don't like it it's because you have partisan bias (???)
Those prosecutors were deeply embarrassed by missing FTX at the time, so they then had the SEC and IRS harass and threaten innocent US citizens in Japan and the US as they fished for charges merely because they happened to once work for or hung out with CZ or employees at Binance.
CZ is the first and only known first-time offender in U.S. history to receive a prison sentence for this single, non-fraud-related charge of improper platform AML KYC implementation. Big banks routinely pay a fine for this, and never face imprisonment. The judge found no evidence that he knew of any illicit transactions and that it was reasonable for him to believe there were no illicit funds on the platform. Credit where it's due, they somehow pulled off a 4 month sentence for this unprecedented charge. And now it's all for naught.
Having a bad compliance system is very very different from actively resisting having a compliance system.
Historically bank CEOs have been smart enough to note this difference.
CZ already served the time in prison. It's not clear to me whether he and Binance have paid the fines yet.
Balaji was the former CTO of a rival company. Wouldn't he be incentivized to not support CZ?
No. He had the same financial incentives to not want to have to worry about the BSA and dealing with AML etc. as CZ.
This is not a company vs. company sort of issue, this is a "I want to avoid regulations that would cost me money as a fundamental aspect of my industry " issue.
If Coinbase thought they could legally not worry about all of this, do you think they would want to deal with it?
The sheer quantity of money used in cryptocurrency for money laundering and activity where traditional payment processors will not accept payments (largely illegal, e.g. drugs, counterfeit goods) also means that the keeping the ecosystem healthy involves having ways for this money to flow.
No. The entire crypto ecosystem requires a steady infusion of capital and an absence of regulations to prosper, since their primary use case outside of speculation is for handling money by people who can't get past normal KYC/AML checks. If those people no longer have anywhere to on/off ramp into the crypto ecosystem, most of its "legitimate" (in the sense of actually getting real value out of it rather than just speculating) use goes away.
I don't think you know what you're talking about. Surely everyone on the Coinbase platform is vetted seeing as they're a publicly traded company. Presumably the vast majority of Binance users are not in fact money launderers.
"People who don't want KYC/AML checks" are not necessarily money launderers, and there are still plenty of people who just want to speculate. But money launderers are the people who need to send vast amounts of money through the crypto ecosystem and represented a very significant fraction of the assets managed by Binance (not that this actually affects whether what they were doing was illegal or not, BTW). Maybe you should read the indictment to find out what was actually going on, instead of making claims based on what seems reasonable to you!
(Frankly, the idea that being convicted for making the conscious decision to go out of your way to circumvent KYC/AML laws is somehow the result of partisan bias is ridiculous in itself, so none of this [or how Balaji claims to feel about the matter] is even really relevant).
Because Trump couldn’t have that!
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