2023-11-24 08:36 |
After the cryptocurrency exchange and its former CEO, Changpeng Zhao, entered a guilty plea to federal charges in the United States, Binance’s Bitcoin reserves were reduced by $200 million.
Although CZ has paid his bond, prosecutors are attempting to have him stay in the US until he is sentenced.
Based on on-chain data collected by CryptoQuant, Bitcoin is moving from Binance to Coinbase since yesterday. The research firm recently noted that, compared to Binance, Coinbase’s reserves have reduced by 5,000 BTC, whereas Coinbase’s have grown by approximately 12,000 BTC.
As a result of legal concerns, analysts believe that individual investors are pulling their money out of Binance, which is driving this movement.
A CryptoQuant analyst disclosed that retail investors are shifting their money away from Binance and onto compliant or licensed exchanges, which is causing Binance’s Bitcoin reserves to decrease.
“The decrease in Bitcoin reserves on Binance appears to be a result of retail outflows,” Bradley Park wrote in a note.Greta Yuan, the head of research at the Hong Kong-based digital-asset platform VDX, conveyed in a note that lingering apprehension prevails in the market due to recent legal challenges faced by the company.
In the immediate future, she anticipates a trend of users shifting their funds towards exchanges that are compliant or licensed as a means of seeking reassurance.
According to the US Securities and Exchange Commission (SEC) and many cryptocurrency commentators, Binance has previously utilized its bitcoin reserves to support the value of its own token, BNB. Both CZ and Binance strongly refute the allegations.
Blockchain company Nansen claims that the exchange saw withdrawals of more than $1 billion in a single day after Zhao resigned and acknowledged his guilt in a plea agreement with the US Justice Department. In addition, as market makers reduced their positions, market liquidity dropped by 25%.
A record $4.3 billion settlement between Binance and the DOJ includes a $1.8 billion fine against the cryptocurrency exchange in addition to a $2.5 billion forfeiture. The agreements called for the exchange to withdraw from US markets, financial remittances, and strict compliance guidelines.
The value of BNB had a significant decline of 14% subsequent to the announcement of the settlement and CZ’s resignation, dropping from $264 to $227. As of the current moment, the value is at $233, exhibiting a decrease of 20% in comparison to the corresponding period in the previous year.
Meanwhile, instead of permitting Zhao to return to his residence in Dubai until his February sentencing, US prosecutors are calling for his detention within the country. Because of his involvement in the failure to execute appropriate anti-money laundering measures, the former Binance big boss could spend up to 18 months in prison.
Featured image from Freepik
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