Source: AdobeStock / Iryna Budanova
Binance, the world’s largest crypto exchange, has seen more than $900 million in outflows over the past 24 hours after former CEO Changpeng “CZ” Zhao pleaded guilty to money laundering violations.
According to data from DeFi TVL aggregator DefiLlama, Binance has registered $913 million in outflows over the past day, with $605 million in net outflows over the past week.
The exchange still has net inflows of $1.78 billion over the past month, the largest by far among all centralized crypto exchanges tracked by DefiLlama.
Meanwhile, OKX has ostensibly benefited the most out of customers fleeing Binance.
The exchange has seen net inflows of $146 million over the past day, the largest among all centralized crypto exchanges tracked by DefiLlama.
It is worth noting that non-US users continue to keep their assets on Binance.
Despite regulatory pressure, non-U.S. users persist in keeping their assets on Binance.https://t.co/66yVQGkrrk https://t.co/1TXeqp1Tdx pic.twitter.com/HCEm5nPs2S
— Ki Young Ju (@ki_young_ju) November 22, 2023
Former Binance CEO Pleads Guilty
On Tuesday, Binance, along with its CEO Changpeng Zhao, pleaded 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, Zhao will step down as CEO, and Binance will be required to pay a substantial $4.3 billion fine.
Under the terms of the settlement, Changpeng Zhao will also personally pay $200 million in fines.
He also appeared in court in Seattle to enter his guilty plea and now faces a maximum prison sentence of 10 years.
According to court documents, Binance was charged with multiple offenses, including money laundering violations, US sanctions violations, and conspiracy to conduct an unlicensed money-transmitting business.
The company admitted to failing in its duty to prevent and report suspicious transactions linked to terrorist organizations such as Hamas’ al-Qassam Brigades, the Islamic State, and al Qaeda.
Binance Faciliated Transactions in Sanctioned Regions
The court filing reveals that Binance facilitated transactions exceeding $890 million involving customers in Iran, a country subject to stringent US financial sanctions.
Additionally, the exchange allowed transactions between US users and counterparts in other sanctioned regions, including Cuba, Syria, and illegally occupied areas of Ukraine.
“Binance became the world’s largest cryptocurrency exchange in part because of the crimes it committed—now it is paying one of the largest corporate penalties in US history,” said US attorney general Merrick Garland.
Following Changpeng Zhao’s resignation, Richard Teng, currently the head of regional markets at Binance, will assume the role of CEO.
Teng previously served as the CEO of Abu Dhabi Global Market, a financial regulator in the United Arab Emirates. Sources indicate that Teng is a popular choice among Binance staff.
Today, I stepped down as CEO of Binance. Admittedly, it was not easy to let go emotionally. But I know it is the right thing to do. I made mistakes, and I must take responsibility. This is best for our community, for Binance, and for myself.
Binance is no longer a baby. It is…
— CZ Binance (@cz_binance) November 21, 2023
Apart from the criminal charges, Binance is also facing two civil lawsuits in the United States.
The Commodities and Futures Trading Commission (CFTC) and the Securities and Exchange Commission (SEC) have filed these lawsuits, alleging various infractions such as customer asset commingling, anti-money laundering violations, and artificial inflation of trading volumes.
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