Binance Sees $1.2 Billion Leave Exchange in A Week After Guilty Pleas

Why Trust Techopedia Crypto
KEY TAKEAWAYS

Prior to Binance's guilty plea, the exchange had more than $2 billion in monthly net inflows. However, the platform currently has more than $56 million in net outflows over the past month - with more than a billion withdrawn in the last week.

Binance, the world’s largest cryptocurrency exchange, has seen its monthly net flows turn negative after users withdrew more than $1 billion worth of funds over the past few days amid recent drama. 

According to data from DeFi TVL aggregator DefiLlama, Binance has registered $456 million in outflows over the past day, with $1.2 billion in net outflows over the past week.

Before Binance’s guilty plea on Tuesday, the exchange had more than $2 billion in monthly net inflows. But with the recent week of turmoil, the exchange has seen more than $56 million in monthly net outflow.

Binance is still the world’s largest crypto exchange by far, with more than $68.4 billion in assets. 

The flee of funds from Binance came after its CEO, Changpeng Zhaopleaded guilty to criminal charges related to anti-money laundering and violations of US sanctions. The plea was made as part of a comprehensive agreement reached with the US Department of Justice, allowing the company to continue its operations. 

However, as part of the settlement, Zhao will step down as CEO, and Binance will be required to pay a substantial $4.3 billion fine. Furthermore, Changpeng Zhao will also personally pay $200 million in fines. 

Advertisements

New CEO Suggests Ability to Pay $4.3Bn Fines

On Wednesday, new Binance CEO Richard Teng hinted at the exchange’s ability to pay the $4.3 billion it has been fined by the US Justice Department. Teng, who was named CEO of Binance, said in a recent post on X that the exchange is in good shape financially. 

“The fundamentals of our business are VERY strong,” he wrote. “Binance continues to operate the world’s largest crypto exchange by volume, our capital structure is debt-free, expenses are modest, and, despite the low fees we charge our users, we have robust revenues and profits.”

The statement came in reply to a post by Connor Lango, director of business development at Coinbase, who said Binance will most likely be able to “pay full $4.3B DoJ fine with 0 crypto asset sales.” 

Lango noted that after pulling out the exchange’s crypto holdings from their Proof of Reserves, he discovered that the exchange still had $6.35 billion in total assets and $3.19 billion in stablecoins.

Can Teng Restore Trust in Binance?

In his first post on X as CEO of Binance, Teng said his focus is on restoring the confidence of the exchange’s 150 million users by reassuring them of the “financial strength, security, and safety” of the company. 

His other big areas of focus will be “collaborating with regulators to uphold high standards globally” and “working with partners to drive growth and adoption of Web3.”

“To ensure a bright future, I intend to use everything I’ve learned over the past three decades of financial services and regulatory experience to guide our remarkable, innovative, and committed team.”

Teng’s resume includes senior positions at Singapore’s central bank and Abu Dhabi’s international free-trade zone, making him an ideal candidate to help steer Binance through the current regulatory hurricane.

However, compliance experts have said that customers and regulators will be understandably skeptical despite Teng’s experience in financial regulation and compliance. 

“There’s a lot of work to be done in radically re-imagining the operating and governance model for Binance,” law professor Yesha Yadav told Bloomberg. 

Hirander Misra, CEO of London-based market infrastructure company GMEX, told the publication that Teng is “swimming against the tide” because “a culture of regulatory compliance is very hard to instill in an organization that has evolved in an industry with a lack of regulations.” 

Advertisements

Related Reading

Related Terms

Advertisements
Ruholamin Haqshanas
Crypto Journalist
Ruholamin Haqshanas
Crypto Journalist

Ruholamin is a crypto and financial journalist with over three years of experience. In addition to Techopedia, he has been featured in major media outlets including Cryptonews, Investing.com, 24/7 Wall St, The Tokenist, Business2Community, and has also worked with some prominent crypto and DeFi projects. He holds a bachelor's degree in Mechatronics. Ruholamin enjoys reading about technological developments, writing and observing nature.