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23 Nov, 2023 12:00

Crypto investors pull over $1 billion out of Binance

The outflow follows a huge fine on the exchange and criminal charges against its former CEO in the US  
Crypto investors pull over $1 billion out of Binance

The world’s largest crypto exchange Binance saw a sharp uptick in withdrawals after its founder and CEO Changpeng Zhao pleaded guilty to criminal and civil charges in the US, it was reported on Wednesday. The company also faces over $4 billion in fines.

Outflows from Binance have amounted to more than $1 billion in the past 24 hours, not including bitcoin, market data revealed. Its liquidity has dropped 25% over the same period as market players pulled back their positions, according to data provider Kaiko.

Binance’s native token BNB fell by more than 9%, CoinGecko data showed. The crypto exchange holds around $2.8 billion worth of BNB tokens, according to blockchain analysis firm Nansen.

Although the outflows are significant, assets of more than $65 billion remain on the platform, meaning there has not yet been a “mass exodus” of funds from the exchange. Experts say Binance is likely “capitalized enough to withstand” a sudden withdrawal of investors.

“After the momentary shock of the agreement with the announcement, there is no significant impact on most assets,” said Grzegorz Drozdz, a market analyst at investment firm Conotoxia Ltd.

“Of the top 100 cryptocurrencies, as many as 98 have seen a noticeable rebound over the past 24 hours. Bitcoin, meanwhile, fell 4% before rebounding and remaining with a loss of 1.3%,” he said.

Earlier this week, Zhao agreed to step down from his position as Binance CEO and acknowledged violations of anti-money laundering requirements in a deal brokered with the US Department of Justice.

The reported settlement terms indicate that Binance is expected to forfeit $2.5 billion to the US government and to pay a fine of $1.8 billion, for a total of $4.3 billion.

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