Recent developments surrounding the Binance cryptocurrency exchange have ignited a contentious debate regarding increased US scrutiny of crypto companies.
Omid Malekan, an author and adjunct professor at Columbia Business School, highlights the distinct treatment of the Binance case compared to similar situations in traditional financial spheres. Malekan contends that the US Department of Justice’s (DOJ) approach differs significantly between cryptocurrency and traditional finance when facing comparable issues.
US DOJ’s Approach and Malekan’s Critique
Malekan asserts on Twitter that there exists a notable discrepancy in how the DOJ handles cases between cryptocurrency exchanges like Binance and traditional financial entities.
He criticizes the belief that cryptocurrencies enable illicit activities more than traditional financial systems, stating that even firms complying with Anti-Money Laundering (AML) guidelines handle substantial illegal funds under the guise of proper documentation.
Malekan argues that if traditional finance faced identical scrutiny as Binance, numerous finance industry individuals would potentially face imprisonment.
Ethical Concerns Regarding Binance’s Actions
Despite his critique of the US regulatory approach, Malekan acknowledges ethical issues within Binance’s operations while emphasizing their alleged dishonesty with customers and non-compliance.
Binance and its co-founder, Changpeng “CZ” Zhao, recently settled with the US government for a multibillion-dollar sum. Allegations were linked to the exchange purportedly allowing the transfer of “stolen funds” tied to illegal activities. As part of the settlement, CZ stepped down from his CEO position at Binance.
Implications and Malekan’s Perspective
The Binance case has raised concerns about how the US government approaches cryptocurrency regulation compared to traditional finance.
Furthermore, Malekan’s viewpoint underscores the debate regarding the ethical handling of crypto companies along with the differential treatment they receive in comparison to their traditional finance counterparts.
Despite criticism towards regulatory discrepancies, ethical concerns remain central to the evaluation of Binance’s actions and the ensuing settlement with the US government.