Binance's Battle with DOJ: A Look at Crypto Oversight and Financial Inclusivity
Summary:
The recent action against Binance, a cryptocurrency exchange, by the Department of Justice, has reignited the discussion about US scrutiny on cryptocurrency firms. Omid Malekan, a Columbia Business School adjunct professor, expressed that Binance was treated differently than traditional firms, and questioned the lack of uniformity in law enforcement. Despite criticizing Binance's non-compliance, he praised its role in promoting financial inclusivity. Meanwhile, leaked documents by the International Consortium of Investigative Journalists showed that trillions of dollars were laundered by criminals through major global banks.
The recent turmoil involving Binance, a cryptocurrency exchange, has sparked a heated discussion about the United States' intensified scrutiny of cryptocurrency firms. Omid Malekan, a part-time professor at Columbia Business School and a prominent author, believes that the Department of Justice's tactics in the Binance case differ significantly from those employed in traditional finance. Malekan expressed on X (previously known as Twitter) that individuals who consider cryptocurrency as an exclusive facilitator of illicit activities fail to comprehend the operations of the broader financial system. According to him, even companies adhering to Anti-Money Laundering guidelines end up handling substantial amounts of illegal funds merely because the necessary paperwork is completed.
Malekan further criticized the potentially unfair treatment towards Binance, suggesting that conventional Wall Street firms would result in numerous imprisoned managing directors if subjected to similar scrutiny. However, he also vehemently condemned Binance's misinformation to its clients and non-compliance with regulations. As part of a billion-dollar settlement with the U.S. government for alleged involvement in unauthorized activities through the exchange, Changpeng "CZ" Zhao, the co-founder of Binance, stepped down from his position as CEO.
Despite these contentious issues, Malekan acknowledged Binance's efforts in promoting financial inclusivity in recent years, stating that the exchange has successfully integrated millions of impoverished and marginalized individuals into the financial system - a task mainstream compliant finance firms have consistently neglected.
According to documents unearthed by the International Consortium of Investigative Journalists (ICIJ), some of the most prominent global banks allowed criminals to launder trillions of dollars. In September 2020, investigations exposed that over 2,100 suspicious activity reports concerning transactions exceeding $2 trillion between 1999 and 2017 had been flagged for possible illegal activities or money laundering. Massive institutions such as Bank of New York Mellon, Deutsche Bank, and HSBC were indicated in these dealings. To investigate the allegations of money laundering, ICIJ coordinated more than 400 journalists from 110 news organizations across 88 countries.
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Published At
11/25/2023 9:13:12 PM
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