As the legal peril facing the world’s largest crypto exchange by daily trading volume, Binance widens critical market players has questioned the compliance of the firm. For months, Binance and the chief executive Changpeng “CZ” Zhao have encountered intense regulatory backlash with the US regulators.
A recent report from the author of the Department of Justice and a professor at the Columbia Business School, Omid Malekan, argued that the Binance case is a complex in nature. He added the Binance legal case was the first to have been witnessed in traditional finance (TradFi). Updating the X community, the scholar condemned the ongoing anti-crypto sentiments linked to the Binance case.
Binance Use in Illicit Transfer of Funds
Malekan opposed sentiments that described crypto as an avenue for bad people and retaliated that most people were uninformed about the changes in the financial sector. Citing the business practices of most successful crypto firms, the professor admitted that bad players still use these platforms to transfer illicit funds despite embracing Anti-Money Laundering (AML) measures.
Malekan noted that with the existing regulation, as long as the crypto firm has complied with the regulatory requirements and filed all the paperwork, the regulators might fail to identify illicit fund transfers. Malekan admitted that if the regulators treated traditional firms like Binance, most of the key Wall Street makers might face potential legal action.
The professor argued that if firms in conventional finance receive equal treatment to Binance’s, most top-level executives might be rotting in jail. After analyzing the Binance case, Malekan confirmed that the controversial crypto exchange made a mistake in lying to the customers.
Citing the existing crypto regulations in the United States, the professor noted the mistake made by Binance was operating as a non-compliant firm. Malekan’s statement came when the Binance CEO reached a multi-billionaire agreement with the US law enforcers.
Overview of Binance Case
Following the ongoing legal and regulatory actions against Zhao, the Binance CEO resigned. The regulators accused Binance of allowing criminals to transfer funds through the crypto exchange.
Despite the legal actions against Binance, Malekan was pleased to state that the crypto exchange has been at the forefront of curbing the potential gaps in financial industry. The professor applauded Binance for bringing the masses to the ever-growing financial sector and promoting financial inclusivity.
A revisit of the Binance customer base demonstrated that the crypto exchange supported millions of users accessing critical financial products.
Malekan confirmed that Binance is considered a market leader compared to high-profile firms due to its sustainable customer base. The scholar noted that Binance customers are from different races and ethnic groups.
ICIJ Probes Illicit Fund Transfer
In a recent study, the International Consortium of Investigative Journalists (ICIJ) noted that most of the fast-paced banks in the world have supported the laundering of millions of dollars. The ICIJ study analyzed most of the financial transactions involving illicit funds transfer.
In their findings, the ICIJ team noted that between 1999 and 2017, around 2100 transactions worth approximately $2 trillion were considered unlawful. These susceptible activities involve money laundering and other financial fraud.
Beyond this, ICIJ noted the suspicious transactions involved best-performing financial institutions such as the Deutsche Bank, HSBC, and Bank of New York Mellon.
News concerning the involvement of banks in money laundering obliged the ICIJ to conduct an extensive investigation on the matter. The ICIJ tasked 400 journalists from 110 news outlets to investigate the involvement of banks in money laundering.