In a shocking turn of events, investors have withdrawn a staggering $956 million from Binance within the past 24 hours, following the resignation of its CEO Changpeng Zhao and the announcement of a record-breaking $4.3 billion settlement with U.S. authorities. The move has ignited concerns about the future of the world’s largest cryptocurrency exchange, which has been grappling with a series of scandals in recent months.
Changpeng Zhao, widely known as CZ, stepped down after pleading guilty on Tuesday to resolve a lengthy U.S. illicit finance investigation. The settlement agreement has left the crypto community questioning the extent of Zhao’s potential prison time and the influence he may retain over Binance, given his role as the founder and major shareholder of the exchange.
Richard Teng, a senior executive who joined Binance in 2021, has been appointed as Zhao’s successor. The sudden change in leadership raises uncertainties about the strategic direction of the platform and how Teng plans to navigate the ongoing legal challenges faced by Binance in the United States.
Despite the significant outflow of funds, data from crypto analytics platform Nansen, excluding bitcoin flows, indicates that the $956 million withdrawal is a relatively small portion compared to the over $65 billion in assets still held by Binance. The exchange remains a dominant force in the cryptocurrency market, but the recent events have undoubtedly shaken investor confidence.
Financial analysts and industry experts express skepticism that the settlement with U.S. authorities will mark the end of Binance’s legal troubles. The Securities and Exchange Commission’s (SEC) charges alleging violations of U.S. securities laws are still pending, adding another layer of uncertainty to the exchange’s future. Robert Le, a crypto analyst at data firm PitchBook, commented, “Binance is not entirely out of the woods. The ongoing civil lawsuit with the SEC remains a concern for the exchange, which (is) likely to result in further fines.”