In a recent development, Arthur Hayes, the former CEO of BitMEX, has come forward to express his views on the U.S. handling of the sanctions against Binance and its founder Changpeng “CZ” Zhao. According to Hayes, the actions taken by the U.S. are “absurd”. He shared his opinions in a Substack essay.
Binance and CZ have been criminally charged for violations of sanctions and money-transmitting laws. Consequently, Zhao resigned from his position as CEO and the company agreed to pay a sum of $4.3 billion in fines. A court ruling has mandated that Zhao, considered a flight risk, must remain in the U.S. until his sentencing in early 2024.
Hayes criticized these penalties as “absurd” and believes they demonstrate the “arbitrary nature of punishment at the hands of the state.” He compared the situation to the treatment of traditional financial institutions using the example of Goldman Sachs’ $2.9 billion fine in 2020 over the 1MDB scandal, where no consequential action was taken against its then CEO, Lloyd Blankfein.
According to Hayes, the treatment of CZ and Binance indicates a resistance to the revolution of decentralization and blockchain technology, which pose a direct challenge to state power. He concluded his essay by stating, “A problem for the financial and political establishment was that the intermediaries facilitating flows into and out of the industrial revolution named blockchain were not run by members of their class.”
It’s worth noting that Arthur Hayes was prosecuted in 2022 for violating the Bank Secrecy Act and was sentenced to two years of probation.