Amidst the aftermath of founder Changpeng Zhao’s resignation and subsequent guilty plea in a settlement with the Department of Justice, Binance encountered an extraordinary outflow of over $1 billion within the last 24 hours, excluding bitcoin, as per data from blockchain analysis firm Nansen.
As reported by CNBC on Wednesday, the native token of the exchange, BNB, experienced an 8% decline within the same time frame. Nansen’s data unveiled that Binance currently holds BNB tokens valued at around $2.8 billion.
The decline in market share for spot trading in March, triggered by the cessation of zero-fee trading for crypto asset pairs, including bitcoin, served as a significant customer incentive.
Regulatory Saga Culminates in $4.3 Billion Penalties for Binance
After years of regulatory scrutiny, Binance finalized a plea deal, paying $4.3 billion in penalties to the United States government.
Compared to the earlier charges of thirteen securities violations by the SEC against the exchange and its founder, the current outflows mark a substantial shift.
Despite the turmoil, Binance remains the world’s largest cryptocurrency exchange, boasting an annual trading volume in the billions. As per Nansen’s report, over $65 billion in assets still reside on the platform, indicating that it is adequately capitalized to endure an investor exodus, even though withdrawals are on the rise.
Analysts’ Perspectives
Grzegorz Drozdz, a market analyst at Conotoxia Ltd, shared insights with CNBC, stating, “After the momentary shock of the agreement with the announcement, there is no significant impact on most assets. The BNB token from Binance appears to be the most affected, losing more than 9%. However, 98 out of the top 100 cryptocurrencies have experienced a noticeable rebound in the past 24 hours. Bitcoin, despite a 4% initial dip, rebounded and sustained a 1.3% loss.”
Despite the challenges, experts interviewed by CNBC believe Binance is poised to weather the storm, citing the company’s compliance with the DOJ process, a three-year strategy for operational compliance, and the substantial value of assets in the company’s reserves.
