[eastern]

I don't care about Binance or CZ or even crypto but it was worthwhile wading through the article just to learn this:

"The U.S.’s point of view on the matter, elucidated at length in any indictment for financial crimes, is that if you have ever touched an electronic dollar, that dollar passed through New York, and therefore you’ve consented to the jurisdiction of the United States. Dollarization is very intentionally wielded like a club to accomplish the U.S.’s goals."

[justaj]

So wait, does this mean that if an exchange is far outside of the US jurisdiction, it can be subject to the US laws simply by trading in dollars?

How is that even remotely legal?

[eastern]

It's completely legal under the law called 'might is right'.

Forget about exchanges. If a random business anywhere in the world buys a product from a factory in a neighbouring country and settles in dollars, this applies.

[anitil]

Another phrasing I like is 'Bigger Army Diplomacy', from CGPGrey

[appplication]

Why wouldn’t it be? The exclusive purpose of crypto is to circumvent existing regulation for financial transfers. The US government would obviously not be so rosy about that idea, nor would it recognize the “sovereignty” of crypto such that its laws would not apply.

[justaj]

Because I was under the impression that once you buy certain currency, you're allowed to do with it whatever you want. Certainly if you're outside of the jurisdiction of the entity that issues said currency.

[lmz]

Cash yes (it's just another physical token), but bank account / "electronic" dollars are ultimately backed by US bank accounts under US jurisdiction.

[csomar]

You can’t have real dollars without a US bank account.

[pas]

sure you can. if you and your friends start to issue dollar IOUs to each other, it's as real as the ones you get from a US bank when you get a mortgage.

the problem is you can't access global liquidity pools easily with the former. and if you're a B2C company and want to sell to US customers, then the US claims jurisdiction.

[ric2b]

Your friends IOU's are just IOU's, the bank's IOU's are legal tender.

That's the difference.

[pas]

hypothetically if folks in Argentina start to use dollars in their banks and only touch physical dollars (as the interface between US and Argentinian money circulation) they are still using real dollars without touching US accounts.

their banks can form their own interbank exchange, they can even make a central bank that does "open market operations" (can buy and sell things on this exchange from pure air - like the NY Fed's trading desk which is basically the executive manifestation of the FOMC), but of course it'll have a mighty hard time to get price stability. not to mention that the US wouldn't be happy

[wolf550e]

The US military and the US as a large market you want to trade with make it legal.