> and not any other criminal activity
He made a lot of money from the other criminal activity. That's what money laundering is: just because you're not directly trafficking children, for example, doesn't mean you have clean hands when you make significant profits from the people who are.
What you're describing is (in my view) the best casus belli for both the 'war on drugs' and a 'war on crypto', but a moral case does not make a criminal case (on its own).
I don't even necessarily think a 'war on crypto' is needed. The problem is that crypto seems to function as a get out of jail free card for very straightforward financial crimes: you just do the financial crime, but apply a thin veneer of 'but with crypto' and the legal system is utterly bamboozled.
Crypto's problem is that when the law is updated to deal with these stunts, it's suddenly just a crappy version of the existing financial system.
I completely agree that crypto is being used as an end-run (if you'll pardon the expression) around the existing financial oligopoly, whose regulatory burden is paid for by the monopoly rents extracted by the government-endorsed players. The problem is that criminal laws aren't being maximally applied against banks, so instances like this do give the appearance of 'unfairness'.
The war on drugs creates almost all the negative externalities of drugs to try and stop people making their own choices.
It is both a reason not to buy drugs now (you're sponsoring all that other stuff) and a reason it's a ridiculous and immoral policy.
It is also on no way comparable to crypto.
Except, correct me if this is wrong, but he wasn't even convicted of money laundering, let alone the underlying crimes you suggest he was launder the proceeds of. It was simply for failing to register / setup an appropriate AML system. Whether any ML occurred, by whom, and in relation to what... are outstanding questions. If he had done all that and all they got him on was a 4-month technicality, that tends to suggest he was probably innocent (or the investigation was inept).
I'm not sure you understand the point. It isn't that CZ himself was specifically putting forth the effort to launder money. It isn't that he was specifically doing things to try and make it easier. The point is that he had a legal duty to actively attempt to prevent money laundering. Binance was legally required to do this to operate in the US, and did not. The court case produced messages from the Chief Compliance Officer pointing out a myriad of ways in which they were not complying with various laws of this nature and they were ignored.
The BSA is not a technicality and trying to reframe it as one is wild. It is to make sure that people that have a financial incentive to turn a blind eye to money laundering don't turn a blind eye to it. You don't need to be directly involved in the money laundering to be incentivized to let it happen.
The guy was punished with a 4-month jail sentence. It's reasonable to assume his crime was of the sort that would result in a 3-6 month sentence... generally misdemeanors.
It's certainly in a different category than speeding or jaywalking, but it's a lot closer to that than to the 150 years that Bernie Madoff got.