Events surrounding the cryptocurrency exchange Binance has generated a lot of discussion over the US government’s crackdown on cryptocurrency companies. Omid Malekan, a writer and adjunct professor at Columbia Business School, claims that the American Department of Justice’s strategy in this case is very different from conventional financial practises.
Malekan posted on X (formerly Twitter): “People who sincerely believe that crypto is some unique enabler of bad people doing bad things don’t understand how the rest of the financial system actually works.” He also noted that businesses that adhere to best practises for combating money laundering still handle substantial amounts of illicit funds. “But since someone completed the paperwork, everything is regarded as acceptable.”
Malekan further asserted that if established corporations were treated in comparable instances to Binance, many on Wall Street would be imprisoned.
“If they’d been held to the Binance Standard there’d be hundreds of managing directors in jail and less money for shareholder buybacks (or lobbying). But the bankers were smart enough to never question the game.”
Malekan maintains that the exchange was still “wrong for not being compliant and wrong to lie to its customers” in spite of the criticism. Changpeng “CZ” Zhao, Binance’s co-founder, and the US authorities recently came to a multibillion-dollar settlement over claims that the exchange allowed those involved in illegal activity to transfer “stolen funds.” CZ’s resignation as CEO was a condition of the settlement.
Malekan also commended Binance for its recent efforts in promoting financial inclusion:
“It did a reasonably decent job of onboarding tens of millions of poor, brown, and otherwise underprivileged people into the financial system, something the world’s compliant financial firms have chronically failed to do.”