Binance's $4.3bn Settlement: Insights from Former BitMEX CEO & Future Bitcoin Trends
Summary:
Former BitMEX CEO Arthur Hayes discusses Binance's $4.3 billion settlement for violating US laws about money laundering and terrorist financing. He attributes this development to Binance's rapid progress outpacing traditional finance and political sectors. Drawing attention to Binance's role in democratizing access to cryptocurrencies, Hayes contrasts the treatment of mainstream banking institutions during past scandals with the hard-hitting action taken against Binance by the US Justice Department. Hayes also forecasts significant capital movement from China to Bitcoin in coming years due to poor local returns.
Binance, the exchange that has cemented its place as the world's largest by trading volume, has been experiencing barriers due to its rapid growth and operate outside conventional financial establishments, says former BitMEX CEO Arthur Hayes. In depth, Hayes talks about the record $4.3 billion fine Binance paid recently after it and its founder Changpeng “CZ” Zhao confessed to infringing US laws concerning money laundering and terrorist financing.
In only six years, from 2017 to present, CZ's Binance has risen to not only be the leading global exchange but also compete with top 10 traditional exchanges when it comes to daily volume, thereby growing its international clout. Hayes reflects that the issue for financial and political sectors revolved around the notion that those directing the transition into blockchain— the new industry revolution— were not part of their echelon.
Hayes, who himself came under United States Bank Secrecy Act (BSA) for his exchange's deficient know-your-customer (KYC) procedures, draws attention to Binance's role in providing an avenue for the average person to hold stakes in cryptocurrency assets without the involvement of veteran players.
Drawing upon historical references of banking scandals and the 2008 global financial crisis resulting from the U.S. housing market failure, Hayes notes the contrast between the almost absolution of conventional banking and financial institutions and the heavy fine levied on CZ and Binance by the U.S. justice department, highlighting the subjective nature of state-led punishment.
Diving into an analysis of the existing state of U.S. and Chinese economies, Hayes postulates that China will drive significant capital towards Bitcoin in the coming years due to poor local returns. Hayes argues that a scenario is building where China paves a way to increase the funds and affordability of a local Yuan-based credit line. This could cause the price of Dollar-based credit to drop given that China's companies can access a viable domestic choice. This, states Hayes, will cause the dollar prices of fixed supply assets like Bitcoin and gold to surge, due to credit's low prices, and could see capital flow into solid monetary assets such as Bitcoin.
Published At
11/28/2023 10:14:28 AM
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