Yet another story in the saga of the US extending their legal jurisdiction into other countries. This story involves an African American financial trader who moved to Singapore and started a business there, an internet platform for the exchange of Bitcoin. The US accused him of not having in place enough safeguards to prevent people in the US from being able to conduct trading through the company, since the business does not comply with US financial regulations. Let's keep in mind that Bitcoin is actually just a form of information, which is traded like fiat currency. People in the US sent this company in Singapore money, and because of that the Justice Department in the US decided they have the right to press charges against a man in Singapore. Arthur Hayes, the African American founder of BitMex was required to post $1.5 million cash bail to remain at his home in Singapore, while US criminal charges work their way through the courts. The company has already agreed to pay a $100 settlement to the CFTC, a US government financial regulatory department. Keep in mind there was no fraud or theft that happened here, and the alleged misdoings happened outside of the US in another country. But still the US was easily able to get a man in Singapore arrested. He turned himself in, was presumably held for a few days until he was released on bail. And presumably it is possible, if the court in Singapore gives its approval, he could be extradited to the US to face charges there. Business Insider, One of the world's biggest crypto exchanges agrees to pay $100 million and block US users as part of a legal settlement, August 2021 Vanity Fair - The Rise and Fall of Bitcoin Billionaire Arthur Hayes I am questioning whether the US Justice Department is respecting rule of law and the concept of national sovereignty in the area of individual legal jurisdiction. At least from a civil liberties and Libertarian perspective, the question arises whether a government has the right to enforce its rules on individuals in a totally separate country. Imagine you are running a business and, unknown to you, let's say some people in North Korea are circumventing the barriers you have in place and sending you money to buy information. The North Korean government than applies for an arrest warrant and the government where you are arrests you. You are accused of not following North Korean financial regulations and not creating enough of a barrier to try to prevent people in North Korea from doing business with you, even though most of your buyers are relatively anonymous. If anyone really thinks about this, it will be obvious to them what the problem with this is, and the type of precedent this type of thing could set. The US is enforcing its rules and laws on other people in other countries.
Let's also point out the significance of what this means. The company in Singapore is paying $100 million to the US government while at the same time agreeing to not do business with US citizens. Normally companies in other countries do not have a reason to pay a fine to the US government unless they want to continue to have access to the US market. This obviously does not seem to be the case here. Why is the company paying? Because they are afraid of legal action from the US. What does that tell you when a company in another country is afraid of legal action from the US? The US obviously has a huge amount of legal power extending into other countries. The US Justice Department seems to be selectively applying its regulations, in some cases, as if they applied equally around the world instead of just within the US. And the courts in other countries don't seem to have a problem with that and are just arresting individuals, upon request from the US Justice Department, and having them extradited to the US to face criminal charges there. Let's also keep in mind some of these rules that were violated were not even laws passed by the US Congress, but rather were rules issued by US bureaucrats, since some law delegated them the power to make rules to regulate some type of financial transaction.
What does his skin colour have to do with anything? You really seem obsessed with pointing this out in anything you discuss. A company doing business in a country is going to be subject to that countries laws (in relation to that business at least) regardless of where the company is based. For example, if you mail-order something from abroad, your nations laws will apply to the product delivered. The internet makes that concept more complex and ethereal but the it's still the same underlying principle. Loads of companies already evade (legitimately or not) laws and regulations by basing (or at least registering) their company elsewhere and it routinely causes issues with criminality, fraud and consumer protection and again, the internet makes that so much easier (especially when the product itself is digital). There are certainly questions of balancing rights and freedom but you can't just pretend it doesn't raise a whole significant range of risks that need accounting for.
But the company was not trying to do business with the US. The company had an official policy, supposedly, of not doing business with people in the US. But the US accused the company of not having enough safeguards to prevent people in the US from circumventing those barriers and doing business with the company without the company's knowledge about what country they were actually from. Since the company only accepted money and gave Bitcoin (which is just a form of information) in exchange, it would be a little bit difficult to determine where the customers actually lived.
I'm thinking part of the reason for what happened may be about money. The government under the Democrat majority has been running huge budget deficits. The CFTC might be looking for easy sources of money, rich people and companies in other countries. I also previously read that the Department of Justice gets to keep a portion of any fines they collect, which can increase the funds for their own department. Which could lead to a perverse incentive to issue criminal charges against companies to coerce money out of them. The government is probably under pressure to go after these financial companies and start finding wrongdoing - real or not - and try to squeeze money out of them. Sometimes rather than look for genuine wrongdoing, an unscrupulous prosecutor might just look for an easy target and then try to come up with what sort of laws could be used to make a case against them. The government also might not be the most enthusiastic about Bitcoin because it is worried it could be used as a means of tax evasion.
Technically it does I suppose if any of the transactions actually originated in the US. If it is just a theoretical exercise, then I doubt they do.
The company did not accept transactions that they knew came directly from the US. However, transactions can come indirectly from the US, or persons in the US can conduct transactions in such a way that it's not completely obvious to the company they are coming from the US. The main complaint from the US Justice Department seems to be that they did not do more to make sure none of their business was coming from the US. The company claims it was already their policy before not to intentionally accept business from the US.
As long as there is some nexus to the US they have a better shot at holding the charges than they would if there wasn't. I am more troubled by the efforts to extradite Meng Wanzhou to the US. She is an executive of a chinese company in Canada that is being charged based on a conversation she had with a British bank. There seems to be no nexus there. Anyway, we have an extradition treaty with Singapore so what this will boil done to is the willingness of the last court to hear the case/appeal to slap the Justice Department in the teeth. What we are seeing is the same sort of overreach that got McDonnell's conviction tossed unanimously by the SCOTUS. The DoJ has a bad habit of doing this---inventing jurisdiction and crimes for behavior it or its political masters don't like.
Of course there is some nexus. It's just a very indirect nexus, and it's very questionable how intentional that nexus was, and where the responsibility lies. Rather that try to arbitrate it out in court, the government just pressured a settlement out of the company and got the CEO arrested before any questions were asked. The details of the article don't even make it clear whether the company even accepted US dollars or if this was done through some other currency. I am not sure if that detail even matters. Might not have even been actual US dollars if it was through some foreign bank account. Just claiming there is some vague concept of a nexus does not seem like enough by itself to justify this. I see that a lot of people just want to find some way of justifying these things. It's psychologically easier for them if they can dismiss it as not being problem.
....or maybe the laws aren't what you think they are. Anyway, like I said, There may or may not be a connection to the US for the transaction. If they are trying to bootstrap this onto a bootstrap on a bootstrap, it probably would not survive a SCOTUS appeal.
