The former BitMEX CEO, Arthur Hayes, said the record-breaking penalties imposed on Binance and CZ are ‘absurd’ and represent an institutional bias against the transformative impact of cryptocurrency and blockchain technology.
According to Hayes, Binance and its founder Changpeng “CZ” Zhao have been treated the way they have been in the US because the crypto exchange, and other centralized exchanges, represent a threat to the traditional American-led global financial system.
Last week, Binance and its founder were criminally charged for violating sanctions and money-transmitting laws. CZ pleaded guilty and agreed to pay $4.3 billion in fines.
This also prompted Zhao to step down as CEO. Zhao was determined by a court to be a flight risk and must remain in the US until his sentencing early next year.
Compared with penalties given out to other large traditional financial institutions, those handed out to Binance and CZ are “absurd” and highlight “the arbitrary nature of punishment at the hands of the state,” Hayes wrote.
“Did former Goldman Sachs CEO, Lloyd Blankfein, and GS get the same treatment as BInance and CZ?” Under his reign, Lloyd helped former Malaysian Prime Minister, Najib Razak, and financier, Jho Loh, steal more than $10 billion, Hayes wrote, referring to the 1Malaysia Development Bhd. (1MDB) scandal that was uncovered in 2015.
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Goldman Sachs only ended up being fined $2.9 billion in 2020 and Lloyd got to retire with his stock options intact. GS was not deemed criminally responsible. Hayes added that CEOs of major banks weren’t prosecuted for the 2008 financial crisis.
Hayes argues that the treatment of CZ and Binance is indicative of resistance against decentralization and the blockchain revolution, which, he said, directly challenge state power.
“The state powers centralization, and collaboration is achieved through threats of violence,” he wrote. “A problem for the financial and political establishment was that the intermediaries facilitating flows into and out of the industrial revolution named blockchain were not run by members of their class” he added.
Hayes himself is no stranger to state prosecution. In February 2022, he pleaded guilty to violating the Bank Secrecy Act because he willfully failed to implement an anti-money laundering (AML) program at the exchange. Later that year, he was sentenced to two years of probation.
Source: https://bitcoinworld.co.in/arthur-hayes-us-treatment-handed-out-to-binance-and-cz-is-absurd/