- Binance is facing intensifying legal battles within the United States.
- The former CEO of the crypto exchange BitMEX is advocating against the enforcement actions on the exchange.
- CZ has recently stepped down from his position as the CEO of Binance.
Throughout 2023, US regulators have intensified enforcement actions against Binance, the world’s leading cryptocurrency exchange by trading volume. From lawsuits to sanctions, the exchange has grappled with a string of legal challenges from financial watchdogs, including the SEC and CFTC.
The latest in its woes was its settlement with the United States Department of Justice (DOJ), costing the exchange $4.3B, and its CEO, Changpeng “CZ” Zhao, who stepped down as part of the agreement.
The year-long ordeal has sparked reactions from industry experts and investors alike, including crypto mogul Arthur Hayes.
CZ Paid For The Transgression Of Decentralization
In a blog post on November 28th, former CEO of BitMEX exchange Arthur Hayes expressed dissatisfaction with the ongoing attacks against Binance and its ex-CEO Changpeng “CZ” Zhao.
Hayes emphasized that the regulatory actions against CZ are unjust. According to him, CZ was cast as a scapegoat for the transgression of the decentralized nature of blockchain and cryptocurrencies, which challenge traditional financial institutions by enabling individuals to control assets directly.
Drawing parallels to historical sanctions, he criticized the seemingly arbitrary nature of punishment by the regulators, questioning why Binance faced such severe consequences when other industry figures like Goldman Sachs CEO Lloyd Blankfein and Malaysian Prime Minister Najib Razak did not face similar penalties despite their involvement in significant wrongdoing.
The former CEO emphasized the magnitude of the fine imposed on CZ, which marked the largest corporate fine in American history.
“How dearly did CZ pay? CZ – and by extension, Binance – paid the largest corporate fine in Pax Americana history … Four Point Three Billion United States Dollars!”
Hayes’ blog post reflects a critical opinion on the evolving regulatory landscape within the industry, particularly in the wake of the recent challenges facing Binance and CZ.
Binance’s Legal Woes
In March, the Commodities Futures Trading Commission (CFTC) filed a lawsuit against Binance, its U.S. arm, and affiliates, alleging the violation of derivatives laws. The lawsuit also stated that Binance operated illegally in the US by offering unregistered derivatives contracts to US investors. It promoted the use of VPNs among investors to bypass its restrictions.
The Securities and Exchange Commission (SEC) also brought charges against the exchange in June, further compounding its challenges. The SEC’s allegations included violating securities law and misrepresenting trading control and oversight on the Binance.US platform.
Adding fuel to the fire, the U.S. Department of Justice secured felony criminal pleas from Binance, its founder, and its U.S. subsidiary on several charges, including violating U.S. anti-money laundering requirements and sanctions law breach. The legal debacle resulted in the resignation of CZ as Binance CEO, his indictment, and a 4.3 billion settlement.
On the Flipside
- While some industry figures have shared the same sentiment as Arthur Hayes, others have lauded the DOJ’s actions as plausible.
- The now-former CEO of Binance is in a legal battle with the DOJ and is scheduled for a court trial in February 2024.
- CZ has been restricted from leaving the U.S. following the DOJ’s argument that he poses a flight risk.
Why This Matters
The legal challenges embattling Binance have cast a cloud of uncertainty on the exchange and its operations, and positive remarks by industry figures kike Arthur Hayes may contribute to the restoration of the exchange’s integrity.
To find out more about the Binance-DOJ saga and CZ’s exit as CEO, read here:
“Binance Will Be Fine,” CZ Pens Final Note to Staff as CEO
Ethereum-based multi-chain platform KyberSwap suffered a hack that drained $46 million. Read more:
KyberSwap Attacker Taunts Protocol With Step-By-Step Guide
Source link: https://dailycoin.com/ex-bitmex-ceo-condemns-us-regulatory-actions-against-cz/
