In the aftermath of the recent resignation of Binance founder and CEO Changpeng Zhao, coupled with a settlement with the Department of Justice, the leading cryptocurrency exchange has witnessed outflows exceeding $1 billion within a twenty-four-hour period, excluding bitcoin. Data from blockchain analysis firm Nansen revealed the significant financial impact on the platform.
According to a report by CNBC on Wednesday, the native token of the exchange, BNB, experienced an 8% decline within the same timeframe, adding to the financial challenges faced by Binance. Nansen’s data indicated that Binance currently holds BNB tokens valued at approximately $2.8 billion.
The decline in market share for spot trading occurred in March, following the removal of zero-fee trading for various crypto asset pairs, including bitcoin. This decision, which eliminated a significant customer incentive, contributed to a decrease in trading activity on the platform.
Years of scrutiny into Binance’s operations concluded with a plea deal, resulting in the payment of $4.3 billion in penalties to the United States government. This substantial settlement marks a pivotal moment for the cryptocurrency exchange, surpassing the impact of previous charges that included thirteen securities violations by the SEC.
Despite the challenges, Binance remains the largest cryptocurrency exchange globally, boasting an annual trading volume in the billions of dollars. Current data from Nansen suggests that the platform is sufficiently capitalized to weather the storm, with over $65 billion in assets still held on the exchange. Although there is a notable increase in withdrawals, a “mass exodus” of funds has yet to materialize.
Market analysts, including Grzegorz Drozdz from investment firm Conotoxia Ltd, observed that the market experienced a momentary shock following the announcement but noted that the impact on most assets was not significant. Drozdz highlighted the BNB token as the cryptocurrency most affected, witnessing a loss of more than 9%. However, 98 out of the top 100 cryptocurrencies rebounded over the past 24 hours. Bitcoin, initially falling 4%, recovered and maintained a loss of 1.3%.
Despite the turbulent situation, experts interviewed by CNBC expressed confidence in Binance’s ability to survive the ordeal. They cited the company’s compliance with the DOJ process, the implementation of a three-year strategy to bring operations into compliance, and the substantial value of assets held in the company’s reserves.
Notably, the naira maintained stability in the cryptocurrency market, trading against the dollar on Binance within the range of N1120 to N1150, despite the $4.3 billion settlement with U.S. authorities, as earlier reported by Nairametrics.