Former BitMEX CEO Arthur Hayes has written a new essay sticking up for fellow convicted offshore crypto exchange operator Changpeng Zhao, the founder and CEO of Binance until his recent guilty plea in a criminal case from the U.S. Department of Justice.
“Why the fire and brimstone for a company not even a decade old?” asks Hayes in a blog post published on Monday, comparing the treatment of Zhao — known in the crypto world as “CZ” — to that experienced by heads of traditional financial companies tied to wrongdoing.
“Did Former Goldman Sachs CEO Lloyd Blankfein get the same treatment as GS under his reign helped Former Malaysian Prime Minister Najib Razak and financier Jho Loh steal more than $10 billion and saddle a developing country with more expensive international debt?” Hayes asked in his post. “No, Lloyd got to retire with his stock options intact, and GS was not deemed criminally responsible.”
A U.S. citizen and former Deutsche Bank and CitiBank trader, Hayes founded crypto derivatives exchange BitMEX after being laid off from the latter tradfi company.
BitMEX would ultimately face charges of Bank Secrecy Act violations similar to those Zhao has pleaded guilty to. Like their tradfi counterpart referenced above, Hayes and his co-founders, Ben Delo and Sam Reed, did zero jail time. Following a guilty plea, Hayes received six months of house arrest and two years of probation in May of last year.
Like Hayes, Zhao has pleaded down considerably the charges that the U.S. listed in its original indictment. Zhao’s sentencing is scheduled for Feb. 23, where he faces a maximum of 18 months behind bars. A recent courtroom loss will keep him in the U.S. for the next three months.
“The treatment of CZ and Binance is absurd, and only highlights the arbitrary nature of punishment at the hands of the state,” Hayes wrote, calling the penalty assessed them “the largest corporate fine in Pax Americana history.” (To be sure, the $4.3 billion Binance fine is just over a fifth of what BP paid in 2016 for the Deepwater Horizon oil spill).