Zhao Plea Deal: Traders ‘Withdraw Over $1 Billion’ From Binance In 24 Hours

7 months ago
1 min read

Twenty-four hours after Binance founder, Changpeng Zhao resigned and pleaded guilty in a settlement with United States authorities, outflows from the world’s largest crypto exchange by trade volume have exceeded $1 billion, excluding bitcoin.

In a report by CNBC on Wednesday, it was noted that within 24 hours, the native token of the exchange, BNB, has declined by over 8 per cent. The report was based on data from blockchain analysis firm, Nansen, which showed that Binance possesses BNB tokens valued at approximately $2.8 billion.

However, a “mass exodus” of funds from the exchange has not yet occurred, despite the fact that withdrawals are increasing. Meanwhile, the exchange experienced a decline in its market share of spot trading in March subsequent to the elimination of zero-fee trading for crypto asset pairs, including bitcoin, which was a significant customer incentive.

Years of inquiry into the cryptocurrency exchange has been concluded with a plea deal and the United States government also received $4.3 billion in penalties from Binance. The company agreed to pay “one of the largest penalties” the U.S received from a defendant to settle criminal charges that it had broken money-transmitting and sanctions laws.

Binance chief executive officer, Changpeng “CZ” Zhao entered a guilty plea in Seattle to charges that he personally faced. In exchange, he agreed to give up his position and pay a fine of $50 million.

With an annual trading volume of billions of dollars, Binance continues to be the largest cryptocurrency exchange in the world. Binance is presumably sufficiently capitalised to withstand an abrupt exodus of investors, as more than $65 billion in assets continue to be held on the platform, as reported by Nansen.

Despite the turbulent situation, experts with whom CNBC spoke with predicted that Binance would likely survive the ordeal, citing the company’s compliance with the Department of Justice process, implementation of a three-year strategy to bring its operations into compliance, and the value of assets held in the company’s reserves.

A market analyst at investment firm Conotoxia Ltd Grzegorz Drozdz was quoted as saying, “After the momentary shock of the agreement with the announcement, there is no significant impact on most assets.

“The cryptocurrency that seems to have suffered the most, losing more than 9 per cent, is the BNB token from Binance. Of the top 100 cryptocurrencies, as many as 98 have seen a noticeable rebound over the past 24 hours. Bitcoin, meanwhile, fell 4 per cent before rebounding and remaining with a loss of 1.3 per cent.”


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