- A staggering $200 million has exited Binance’s reserves and market players are connecting to move to CZ’s recent revelation.
- The former Binance CEO confirmed that he had reached a plea deal with U.S. authorities after receiving federal charges.
The market is getting progressively chaotic for Binance, one of the world’s most valued cryptocurrency exchanges in the world. The exchange has seen its reserve decline by $200 million following the exit of Changpeng Zhao, its founder and former CEO.
Last week, the cryptocurrency market was rocked by a post from Changpeng Zhao, popularly known as CZ, in which he detailed his decisions to step down as the CEO of Binance. Following his official statement, the exchange recorded a significant outflow of funds.
Investors and market players were notably withdrawing their funds from Binance and moving it to Coinbase, a perceived rival exchange. At present, Binance’s reserves have declined by a staggering $200 million. On the flip side, Coinbase’s reserves have surged by 12,000 BTC ($450 million).
Market experts believe that the outflow of funds from the exchange is a result of collective concerns from investors after CZ made some concerning revelations.
As stated in his official announcement, CZ reached a plea deal with the authorities after being slammed with federal charges in the United States.
Key figures are certain that Binance might continue to lose value as its credibility becomes more questionable. Speaking to this effect, Greta Yuan, the head of research at the Hong Kong-based digital asset platform VDX made some remarkable assertions.
More troubles for Changpeng Zhao as U.S. officials call for his detention
In a note, Yuan disclosed that the ongoing legal challenges facing the exchange could put more hurdles in its way. In addition to this, users are expected to continue transferring their funds to exchanges that are perceived as more legitimate and aligned with regulatory policies.
Market observers are convinced that Coinbase could replace Binance to become the most reliable exchange in the long term.
Deposit stepping down as the CEO of Binance, CZ is still at the receiving end of scrutiny from community members and market observers for his role in the exchange’s current losses.
Per the U.S. Securities and Exchange Commission (SEC), the Binance exchange has propped up the value of the BNB token in previous times, by using its Bitcoin reserves. CZ has rejected these claims on several occasions and has most recently stated that the exchange did not misappropriate any funds or partake in market manipulation at any point.
According to an observation made by Blockchain company Nansen, Withdrawals from the exchange have also soared to a whopping $1 billion since CZ made his resignation public. As traders and investors withdraw their tokens, market liquidity has depleted by more than 20%.
Despite settling with authorities, following his plea deal, persecutors are calling for sanctions to be imposed on the billionaire.
“Zhao’s significant assets and strong ties to the UAE, as well as the government’s inability to extradite him from the UAE, favor a ruling from this court that he be required to remain in the United States until his sentencing on February 23, 2024.” they said.
