The customers surely have standing to sue Binance. But to close the gap between what you feel should happen and what could actually happen… exactly what crime could they be prosecuted for?
The customers surely have standing to sue Binance. But to close the gap between what you feel should happen and what could actually happen… exactly what crime could they be prosecuted for?
What would they sue for? Nobody lost any funds.
Why should we believe Binance when they say all customers will be made whole, and how will they do that, with what money?
It seems very unlikely they have $3-6B lying around ready to repay customer deposits. At the very least this would be catastrophic for them if they do lose all that money.
Have they re-enabled withdrawals yet? If I were a customer I'd be taking everything out as soon as possible.
> It seems very unlikely they have $3-6B lying around ready to repay customer deposits
For Binance? I’d actually say very likely. They’d need to move a couple of papers around, but should be easy.
their stated plan, for what it’s worth, is that they have $6.34B of company funds set aside, most of it already in the same coins that were taken, plus the SAFU emergency fund at about $1B. around $3B of the stolen money is frozen at Tether, Circle and others, and CZ’s own post on X put the rest of the gap at about $2B.
withdrawals have been paused since Thursday night. binance says it will reopen them in stages from Sunday and publish proof of reserves by Monday, which is the thing that would actually answer your question.
Vouched. Not sure why this was flagged.
They have much more than 6b lying around. They are a money printer .
It is estimated that Binance has revenues of 20 billion and 7-8 billion in profit a year.
Funds have been already allocated for recovery by the CEO Richard Teng.
They don't need need money. What was stolen was some sort of "digital assets". How are they going to cover that, I have no idea, but let's not equate crypto assets with money. If someone would have stolen my bike, i wouldn't be saying "they stole $1000". They stole a bike, which could or could not be recovered, and which was or wasn't covered by insurance.
Criminal Negligence. They have a history of that.
Binance and its former CEO, Changpeng Zhao, were previously sued for willfully evading anti-money laundering (AML) controls. In that instance, the government ruled their compliance failures were not an accident, but a deliberate criminal enterprise. Binance paid $4.3 billion in fines and forfeitures to settle with the DOJ, CFTC, and FinCEN in November 2023.
It looks to me like Binance will be able to scrape together enough money to make their customers whole, so your probably right.
Next time this happens to Binance though they won't have an emergency fund and possibly they'll be in debt, and that's when the users will be very screwed.
Their terrible security certainly indicates to me that future of Binance is not going to be a pretty one unless they make some enormous changes.
I’m sure they could go get some insurance, it’s cost would be a good motivation
Insurance has limits especially in cyber. Eg it could be topped out at $200M.
> exactly what crime could they be prosecuted for?
Note that “crime” has a specific definition in law. You don’t have to be a criminal (commit a crime) to be rightfully sued, civil suits are a thing.
Anyway, your parent comment already answered the question, they would be sued by negligence.
In the U.S., a lawsuit can be either civil or criminal.
Only the government (e.g., federal, state, local) may bring a criminal suit.[1] But in both civil / criminal cases they are still a suit under the law seeking some form of ordered relief from the Court.
Essentially, you can think of "criminal" as a category of law and relief (e.g., prison) that is only accessible to the government.
Both the government and citizens may bring "civil" suits. Very generally, the remedies in civil suits are a court order to 1) stop doing a thing; 2) to do a thing required by law / agreement; 3) to transfer property, usually but not always money, from one party to another; or 4) to define a set of rules governing the parties going forward.
[1] There may be some obscure exception to this, but it is true for everything I've ever seen / heard of.
What negligence? They got their own money stolen. You do not get sued for being robbed of your money, normally. If they do not have the liquidity to let people withdraw money that is another issue, but it does not seem to be the case.
I think it’s the mixed terminology that’s causing confusion. Prosecution is for criminal offenses. Lawsuits are for civil cases.
The distinction between civil vs. criminal was the core of my comment. Sure they can be sued. But what exactly would they be prosecuted for?