Inequitable Treatment of Crypto Companies: Arthur Hayes
BitMEX founder, Arthur Hayes, has criticized the traditional finance (TradFi) industry and its double standards when it comes to dealing with crypto companies. In a blog post, Hayes expressed his dismay at the treatment of Changpeng Zhao (CZ) and Binance, highlighting what he sees as an arbitrary nature of punishment by regulatory bodies.
Hayes pointed out the contrasting penalties imposed on CZ and Binance compared to the leniency shown towards major banks like Goldman Sachs, HSBC, and Credit Suisse, which have been repeatedly fined for money laundering and other financial misconduct.
“Obviously, the treatment of CZ and Binance is absurd, and only highlights the arbitrary nature of punishment at the hands of the state.” – Arthur Hayes
Arthur Hayes
Hayes also questioned the logic behind the massive $4.3 billion fine imposed on Binance, stating that it exemplifies a disproportionate treatment of crypto companies.
“It tells me that crypto is one of the most important political, financial, and technological developments in civilized human history.” – Arthur Hayes
Arthur Hayes, BitMEX founder
The Parallel System: Crypto’s Ethos
Hayes reflected on the original ethos of cryptocurrency as a parallel financial system free from corrupt influences. He suggested that macro conditions and a reset in U.S.-Chinese economic interests may be driving the persecution of Binance and CZ.
“We are attempting to create a parallel financial, political, and economic system that is based on voluntary participation rather than violent coercion.” – Arthur Hayes
Arthur Hayes
Hayes further speculated that the timing of the crackdown on Binance and CZ aligns with recent discussions between U.S. and Chinese leaders, hinting at a joint effort to curtail excessive money printing.
“I ain’t no Dostoyevsky, and this is not a philosophical discussion of crime and punishment, but what does this absurdity tell us about our beliefs?” – Arthur Hayes
Arthur Hayes
“Capital, by which I mean digital fiat credit money, is globally fungible. If China is printing yuan, it will make its way into the global markets and support the prices of all types of risk assets.” – Arthur Hayes
Arthur Hayes
Binance’s Growth in 6 Years
In his post, Hayes acknowledged the remarkable rise of Binance under CZ’s leadership. Binance has become the largest centralized cryptocurrency exchange globally and ranks among the top 10 exchanges in terms of daily trading volume across all markets.
Currently, Binance holds over $66.5 billion in assets. However, recent news of the exchange and its founder pleading guilty to charges related to financing terrorism and money laundering has resulted in more than $1.28 billion in net outflows over the past month.
Hot Take: The Unfair Treatment of Crypto Companies
The treatment of Changpeng Zhao and Binance exemplifies a biased approach towards crypto companies compared to traditional financial institutions. While major banks involved in money laundering have faced relatively lenient penalties, crypto companies like Binance have been subjected to disproportionately harsh measures. This reveals an arbitrary nature of punishment at the hands of regulatory bodies.
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