Recent events centering around the cryptocurrency exchange Binance have ignited a contentious debate regarding the United States’ approach to regulating crypto firms.
Omid Malekan, an accomplished author and adjunct professor at Columbia Business School, has voiced his perspective on the matter, emphasizing the stark differences between how the U.S. Department of Justice (DOJ) handles crypto cases compared to traditional finance.
Malekan contended that those who perceive cryptocurrency as a unique tool for facilitating illicit activities fail to grasp the intricacies of the broader financial system.
He pointed out that even companies adhering to Anti-Money Laundering (AML) best practices often process substantial sums of illicit funds, all deemed acceptable as long as the necessary paperwork is filed.
He further asserted that if Wall Street faced the same scrutiny as Binance, numerous managing directors would be incarcerated, resulting in reduced funds for shareholder buybacks and lobbying efforts.
Malekan opined that these financiers wisely refrained from questioning the existing system.
Nevertheless, Malekan did not absolve Binance of wrongdoing, emphasizing that the exchange was at fault for deceiving its customers and failing to comply with regulations.
Recently, Binance and its co-founder, Changpeng “CZ” Zhao, reached a multibillion-dollar settlement with the U.S. government.
READ MORE: Hong Kong’s Hospital Authority Harnesses AI to Tackle Rising Superbug Threat
They were accused of enabling individuals involved in illicit activities to transfer “stolen funds” through the exchange, prompting CZ to step down as CEO as part of the settlement.
In a surprising twist, Malekan also commended Binance for its role in promoting financial inclusion over the past few years.
He acknowledged that the exchange had successfully onboarded tens of millions of economically disadvantaged individuals, including those who are marginalized or underserved, into the financial system—a feat that compliant financial institutions worldwide have chronically struggled to achieve.
Shifting focus to a broader context, the International Consortium of Investigative Journalists (ICIJ) conducted an extensive investigation into global money laundering.
Leaked documents revealed that some of the world’s largest banks had allowed trillions of dollars to be laundered by criminals.
The investigation, disclosed in September 2020, scrutinized more than 2,100 suspicious activity reports spanning transactions worth over $2 trillion from 1999 to 2017, flagged as potential money laundering or criminal activity by the banks’ internal compliance officers.
Among the implicated financial institutions were major players such as the Bank of New York Mellon, Deutsche Bank, and HSBC.
To probe these alleged money laundering activities, the ICIJ enlisted over 400 journalists from 110 news organizations in 88 countries, highlighting the gravity of the issue.
Discover the Crypto Intelligence Blockchain Council
