BitMEX founder Arthur Hayes has taken a critical stance on the U.S. legal system’s treatment of Binance and its former CEO Changpeng ‘CZ’ Zhao, deeming it “absurd” in a lengthy blog post.
Hayes argued that the $4.3 billion fine imposed on Binance was disproportionately harsh compared to the treatment of CEOs from “Too Big to Fail” banks during the 2007–2008 financial crisis, who, in his view, received a “free pass” due to the potential systemic risks associated with their prosecution.
Furthermore, Hayes suggested that CZ’s rapid rise from obscurity to becoming one of the wealthiest individuals globally, all within a decade, presented a challenge to the “financial and political establishment.” He believes that CZ’s leadership at a cryptocurrency exchange challenged traditional financial institutions by empowering individuals who are not part of the established elite.
CZ recently resigned as the CEO of Binance after pleading guilty to anti-money laundering violations. Binance agreed to a $4.3 billion settlement for anti-money laundering and sanctions violations and decided to exit the U.S. market entirely. In a personal plea deal, CZ posted $15 million and had guarantors provide $5 million in collateral for a $175 million bond. He is facing a potential prison sentence of up to 10 years and a $50 million fine. A judge ruled that CZ must remain in the U.S. until his sentencing in February 2024.
Hayes, the former CEO of BitMEX, stepped down in 2020 after BitMEX faced charges of money laundering and operating unlawfully in the U.S. The U.S. Attorney for the District of New York also charged Hayes with violating the Bank Secrecy Act. In February 2022, Hayes pleaded guilty to violating the Bank Secrecy Act and paid a $10 million fine. He received a sentence of six months of house arrest and two years of probation.
All of this comes as the United States seems to be hardening its stance towards anything crypto or web3 related. There are questions as to what exactly the United States truly is worried about as other countries take a more open and optimistic stance towards the technology. At this time the United States is falling drastically behind other countries that have found ways to properly regulate crypto and see growth in the sector. Only time will tell if the United States was right in its stance or if the decisions made by the governemnt and entities like the SEC will cause the United States to fall behind.