Binance onboarded millions into finance but forgot the paperwork — Columbia professor

1:27 pm
November 26, 2023
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**Binance’s Omission of Paperwork Raises Concerns, Says Columbia Professor**

**Summary:**
The recent actions taken against Binance, a major cryptocurrency exchange, have ignited discussions about the United States’ crackdown on crypto firms. Omid Malekan, an adjunct professor at Columbia Business School, voiced his concerns regarding the U.S. Department of Justice’s approach to Binance and highlighted the disparities between the regulation of crypto and traditional finance. Malekan criticized the exchange for its lack of compliance but also emphasized its role in enabling financial inclusion. Furthermore, an investigation by the International Consortium of Investigative Journalists (ICIJ) revealed that several major banks had facilitated large-scale money laundering activities.

Recent developments surrounding Binance have stirred debates on the regulatory treatment of crypto firms in the United States. Omid Malekan, an adjunct professor at Columbia Business School and author, has expressed his concerns about the U.S. Department of Justice’s actions toward the crypto exchange, noting significant differences from traditional financial regulations.

Malekan critiqued the perception that cryptocurrency uniquely enables illicit activities, pointing out that traditional financial entities also process substantial amounts of tainted funds as long as the necessary paperwork is completed. Additionally, Malekan highlighted the unequal treatment, suggesting that if Wall Street were held to the same standard as Binance, numerous managing directors would face imprisonment.

Despite his criticisms, Malekan acknowledged Binance’s role in broadening financial access for millions of people, particularly those from marginalized communities. The exchange recently concluded a multibillion-dollar settlement with the U.S. government over allegations of enabling illicit fund movements. As part of the settlement, Binance’s co-founder, Changpeng “CZ” Zhao, stepped down from his role as CEO.

Furthermore, an investigation by the International Consortium of Investigative Journalists (ICIJ) unearthed that several major banks had allowed trillions of dollars to be laundered by criminal elements. The investigation analyzed over 2,100 suspicious activity reports, revealing potential money laundering activities totaling over $2 trillion between 1999 and 2017. The implicated banks included prominent institutions such as the Bank of New York Mellon, Deutsche Bank, and HSBC.

**FAQ:**

1. **What is the Binance Standard mentioned in the article?**
The Binance Standard refers to the regulatory enforcement and scrutiny faced by Binance, a leading cryptocurrency exchange, in the United States.

2. **What role did Omid Malekan play in the discussions about Binance?**
Omid Malekan, an adjunct professor at Columbia Business School and an author, provided insights into the disparities between the regulatory treatment of crypto firms and traditional financial institutions, particularly in light of Binance’s case.

3. **What was the outcome of the Binance settlement with the U.S. government?**
Binance reached a multibillion-dollar settlement with the U.S. government related to allegations of enabling illicit fund movements. As part of the settlement, Binance’s co-founder, Changpeng “CZ” Zhao, stepped down as CEO.

4. **What did the ICIJ investigation reveal about major banks?**
The investigation by the International Consortium of Investigative Journalists (ICIJ) disclosed that several major banks had facilitated money laundering activities, allowing trillions of dollars to be laundered by criminal entities.

5. **Who conducted the investigation into global money laundering mentioned in the article?**
The investigation into global money laundering was conducted by the International Consortium of Investigative Journalists (ICIJ) and involved over 400 journalists from 110 news organizations across 88 countries.

6. **What period did the ICIJ investigation cover in relation to suspicious activity reports?**
The investigation analyzed over 2,100 suspicious activity reports involving transactions worth more than $2 trillion between 1999 and 2017, shedding light on potential money laundering or criminal activities facilitated by financial institutions.


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