Binance's $956m exodus: CZ exit sparks outflows
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Binance’s $956m exodus: CZ exit sparks outflows

Binance’s $956m exodus: CZ exit sparks outflows

Crypto currency exchange Binance has seen almost $1bn in outflows after Changpeng Zhao stepped down to settle a US probe.


Investors pulled about $956m from crypto exchange Binance over the past 24 hours, market data showed, after its chief, Changpeng Zhao, stepped down and faced prison time after pleading guilty on Tuesday to settle a years-long U.S. illicit finance probe.

The deal, in which Binance will pay $4.3bn to U.S. authorities, raises questions over the future of the world’s largest crypto exchange and marks another blow for an industry beset by scandals. Zhao has been replaced by Richard Teng, a senior Binance executive who joined in 2021, the company said.

It remained unclear on Wednesday how much jail time, if any, Zhao would ultimately serve, and how much influence he – as Binance’s founder and major shareholder – could continue to exert on Binance under the terms of the settlement.

Some analysts also noted that the deal was unlikely to end the exchange’s US legal woes, with Securities and Exchange Commission charges alleging Binance broke US securities laws still unresolved.

“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,” wrote Robert Le, a crypto analyst at data firm PitchBook.

Data from crypto analytics platform Nansen, which does not include bitcoin flows, signalled some investors had been rattled by the news, pulling $956m from the exchange. Still, the outflows were small relative to the more than $65bn of assets that remain on Binance, Nansen said.

As it strived for market dominance, Binance shunned key checks Zhao believed would turn customers off, authorities said.

Binance did not immediately respond to a request for comment, but said on Tuesday it had worked hard to make Binance “safer and even more secure.” Lawyers for Zhao did not respond to requests for comment on Wednesday. On Tuesday, he conceded “I made mistakes, and I must take responsibility.”

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