Former BitMEX CEO Arthur Hayes has voiced strong criticism against the U.S. treatment of Binance and its founder Changpeng Zhao (CZ), characterizing it as “absurd.” In a recent essay on his Substack account, Hayes contends that the record-breaking penalties imposed on Binance, totaling $4.3 billion, reflect an institutional bias against the transformative impact of cryptocurrency and blockchain technology.
Centralized Exchanges as a Threat to Traditional Financial Systems
Hayes argues that the harsh treatment meted out to Binance and CZ is rooted in the perception that centralized exchanges pose a threat to the traditional American-led global financial system. He suggests that the charges and penalties are part of a broader effort to protect established financial institutions from the disruptive potential of cryptocurrency and blockchain innovations.
Arbitrary Nature of Punishment: A Comparison with Traditional Institutions
Comparing the penalties imposed on Binance to those faced by traditional financial institutions, Hayes deems the measures taken against the crypto exchange as “absurd.” He highlights the arbitrary nature of punishment by the state, citing instances where large banks and their CEOs faced less severe consequences despite involvement in major financial scandals, such as the 1Malaysia Development Bhd. (1MDB) scandal.
Resistance Against Decentralization and Blockchain Revolution
Hayes contends that the treatment of Binance and CZ is indicative of a resistance against decentralization and the broader blockchain revolution. According to him, the rise of decentralized technologies challenges the established state power, disrupting the conventional financial and political hierarchy. Hayes emphasizes that the state favors centralization and collaboration achieved through the threat of violence, leading to resistance against blockchain intermediaries that are not controlled by traditional power structures.
Hayes Advocates for Recognition of Blockchain’s Disruptive Potential
Arthur Hayes concludes by highlighting the fundamental clash between state-centric centralization and the decentralized nature of blockchain. He sees the punitive actions against Binance and CZ as emblematic of the broader struggle for recognition and acceptance of the transformative potential inherent in blockchain and cryptocurrency technologies.