BitMEX Founder Arthur Hayes Calls U.S. Heavy-Handed Treatment Of Binance And CZ ‘Absurd’
Former BitMEX CEO Arthur Hayes has argued that U.S. authorities unfairly targeted Binance and its CEO Changpeng “CZ” Zhao due to the explosive growth and success of the global exchange. Hayes said the record fine imposed on Binance and CZ shows a bias against the transformative potential of crypto and the underlying blockchain technology.
Hayes Slams U.S. Enforcement Action Against Binance, CZ
In a Nov. 28 lengthy post on Substack, Arthur Hayes said the “treatment of CZ and Binance is absurd,” arguing that it “highlights the arbitrary nature of punishment at the hands of the state.”
Last week, Binance and its former CEO were charged for breaking sanctions and money-transmitting laws, agreeing to pay a whopping $4.3 billion in penalties and forcing Changpeng Zhao to resign as CEO. A court recently determined that CZ was a flight risk and thus could not travel to his home in the UAE until his sentencing in February 2024.
According to Hayes, the $4.3 billion fine was disproportionately harsh compared to the treatment of CEOs of major banks who caused the 2008 financial crisis — which was directly attributed to the implosion of the U.S. housing market. Moreover, banking behemoth Goldman Sachs settled with US authorities for its involvement in a billion-dollar corruption scheme. Goldman Sachs didn’t get the same unjust treatment as Binance as it was fined $2.9 billion back in 2020. As Hayes notes, they got “a free pass because to prosecute them would threaten the banking system”.
Hayes Reflects On Binance’s Meteoric Rise In Six Years
The ex-BitMEX CEO further indicated that CZ’s tremendous growth from a “nobody” to “one of the richest humans on earth in less than a decade,” at the helm of a crypto exchange posed a problem to the “financial and political establishment” by disintermediating institutions and giving control to people who are not “members of their class.”
Since its inception in 2017, Binance emerged as a dominant force in the cryptocurrency trading sector. Its meteoric rise to the top “signalled a shift in the financial power dynamic,” Hayes thinks, highlighting decentralized digital currencies’ increasing influence. He concludes that the unfair treatment of Binance and CZ underscores the transformative power of the blockchain ecosystem.
Hayes himself pleaded guilty in February 2022 to violating U.S. Bank Secrecy Act regulations after BitMEX failed to implement an anti-money laundering (“AML”) program at the exchange. He was slapped with a $10 million fine and sentenced to six months of house detention.
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