A day after the head of crypto exchange Binance, Changpeng Zhao, stepped down and pleaded guilty to violating US anti-money laundering laws, investors have withdrawn about $956 million over the past 24 hours, Reuters quoted data firm Nansen as saying on 22 November.
The deal, which will see Binance pay $4.3 billion to US authorities to settle the years-long illegal finance investigation, has raised questions about the future of the world’s largest cryptocurrency exchange. It also marks another blow to an industry plagued by scandals. Meanwhile, Zhao has been replaced by Richard Teng, a senior manager of Binance, who joined in 2021, the company said.
Although the Nansen data does not include bitcoin flows, but signals that the news of Tuesday struck some customers of the exchange. However, there are far more than $65 billion in assets on the platform, according to Nansen data.
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“Binance has seen significant exchange outflows since the announcement, but relative to their total holdings, it’s quite small,” Reuters quoted Nansen analysts as saying.
In June, investors pulled about $1.43 billion from the crypto exchange and its US subsidiary after the US Securities and Exchange Commission sued the companies.
While authorities have probed Zhao and Binance for years, Zhao’s exit marks a dramatic development for one of the most powerful figures in the crypto industry. Zhao, who lives in Dubai, entered his plea in a Seattle court on Tuesday.
Zhao agreed to pay a $50 million fine and faces a maximum prison sentence of 18 months under federal guidelines. Although it was not immediately clear how much prison time the Justice Department was seeking, according to Zhao’s plea agreement he agreed not to appeal any sentence up to that length. Agency officials did not immediately return calls seeking comment Wednesday.
After posting a $175 million bond and an additional $15 million held in a trust account, Zhao agreed to appear at a sentencing hearing on February 23 in Seattle. He agreed to return to the United States 14 days before trial.
With agency inputs.
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Updated: 22 Nov 2023, 23:14 IST