BNB Coin Tanks 12% As Binance Sees ~$1 Billion Outflows, What’s Next?

As the U.S. Department of Justice (DoJ) announced a $4.3 billion settlement with Binance, former CEO Changpeng Zhao stepped down from his position while pleading guilty to security law violations.

BNB Price Tanks 12% Amid Massive Outflows

The immediate effect of all these developments is visible on BNB Coin, the native cryptocurrency of Binance. The BNB Price has tanked by 12% in the last 24 hours and is currently trading at $234 with a market cap of $35.5 billion.

The trading volumes for BNB have also surged to more than $2.5 billion. As per the data from DeFiLlama, crypto exchange Binance witnessed a net outflow of over US$800 million in assets over the last 24 hours, contrasting with OKX, which saw a net inflow of US$145 million. Despite the outflow, Binance retains the largest asset value, surpassing $67.9 billion.

The exchange outflows shot up as Binance’s CZ faces multiple charges while his sentencing is scheduled for February 23, 2024. For now, CZ is out of custody on a $175 million bond. He can also travel to his home country of UAE, however, needs to appear 14 days ahead of the next hearing.

Reports suggest that Binance employees are nervous about the current development while remembering the FTX collapse last year. In a recent revelation, Binance Corporate’s crypto holdings were excluded from their Proof of Reserves, disclosing a total asset value of $6.35 billion, with $3.19 billion held in stablecoins.

It’s important to note that this figure doesn’t encompass off-chain cash balances or funds stored in wallets not covered by the Proof of Reserves. Despite this, the disclosed crypto assets alone suggest the capability to cover the entire $4.3 billion fine imposed by the U.S. Department of Justice without resorting to any cryptocurrency asset sales.

Binance Gears Up for Complete US Exit

Earlier this year, Binance.US stopped trading and operations after the US SEC slapped a lawsuit on the exchange in June 2023. However, as part of the current settlement with FinCEN, Binance will undertake a “complete exit” from the U.S. Additionally, a monitor will be appointed for five years to supervise the exchange’s sanctions compliance program, with the U.S. Treasury Department granted access to Binance’s records and systems throughout this period.

Binance, the cryptocurrency exchange, is set to exit the U.S., paying substantial fines and agreeing to appoint a monitor for a five-year period in order to resolve charges with the Financial Crimes Enforcement Network (FinCEN) and the Office of Foreign Asset Control (OFAC), the money laundering and sanctions oversight bodies of the U.S. Treasury Department.

The settlements entail payment of $3.4 billion to FinCEN and $968 million to OFAC. These agreements come in the wake of accusations by both agencies that Binance violated the Bank Secrecy Act and sanctions programs.

The exchange had previously committed to paying $4.3 billion in fines and forfeitures to the U.S. Department of Justice, settling charges related to sanctions law violations and inadequate maintenance of a proper know-your-customer program. In conjunction with this settlement, Changpeng “CZ” Zhao, the founder and CEO of Binance, is stepping down from his position.

For now, formed Binance CEO Changpeng Zhao is out of custody on a $175 million until the final sentencing in February 2024.