BitMEX founder Arthur Hayes argued. Binance And its former CEO, Changpeng ‘CZ' Zhao, has been singled out for “absurd” punishment by the US legal system.
In a lengthy blog post, Hayes argued that the “treatment of CZ and Binance is stupid” and “highlights the arbitrary nature of punishment at the hands of the government.”
Compared to the handling of the “Too Big To Fail Bank CEOs” that caused the 2007-2008 financial crisis, the $4.3 billion fine imposed on the exchange is disproportionately harsh, Hayes said. “They get a free pass because suing them puts the banking system at risk,” he added.
Hayes went on to suggest that CZ's meteoric rise from “nobody” to “one of the richest men on Earth in less than a decade” represents a challenge to the “financial and political establishment” at the helm of crypto exchanges. Handing over institutions and control to individuals who are not “members of their class”.
Zhao resigned as Binance's CEO earlier this month after pleading guilty to anti-money laundering charges, with the exchange agreeing to pay $4.3 billion to settle AML and sanctions violations and withdraw from the US market entirely.
According to a personal plea deal, Zhao put up $15 million and had sureties post $5 million in bond for a $175 million bond. He faces up to 10 years in prison and must pay a $50 million fine. Yesterday, a judge ordered Zhao to remain in the US until his sentencing in February 2024.
According to the US Department of Justice, Zhao “turned a blind eye to legal obligations in the pursuit of profit”, serving US users without proper oversight and allowing hacker and terrorism-related funds to flow through the exchange. More than $898 million was spent to stop illicit trade between US consumers and residents of sanctioned countries, including Iran, the DOJ said.
Hayes stepped down as CEO of BitMEX in 2020 after the CFTC investigated the exchange for money laundering and operating illegally in the United States, and the U.S. Attorney for the District of New York charged Hayes with violating the Bank Secrecy Act.
In the year Hayes was sentenced to six months of house arrest and two years in prison.
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