Two days ago, Binance founder and former CEO, Changpeng Zhao (CZ) was required to step down from his role as he pleaded guilty to breaking anti-money laundering laws in the US. This resolves a year-long investigation into Binance and CZ by the Commodity Futures Trading Commission (CFTC) and Department of Justice (DOJ).
In this blog, we explore the legal resolution between Binance and the U.S. Department of Justice (DOJ) and the response across the digital asset market. This includes examining fluctuations in the price of Binance's token (BNB), trading volumes and flows on the exchange, as well as the wider implications for the cryptocurrency industry and the regulatory landscape.
Binance Volume & Market Share Dominance
CZ founded Binance in July 2017, which has since become the largest centralised exchange within the crypto industry, sustaining this title from early on in its journey. By March of this year, Binance had amassed a market share of 57%, highlighting its domination of the industry, which has been in a steady uptrend since March 2020.
Two days ago, Binance founder and former CEO, Changpeng Zhao (CZ) was required to step down from his role as he pleaded guilty to breaking anti-money laundering laws in the US. This resolves a year-long investigation into Binance and CZ by the Commodity Futures Trading Commission (CFTC) and Department of Justice (DOJ).
In this blog, we explore the legal resolution between Binance and the U.S. Department of Justice (DOJ) and the response across the digital asset market. This includes examining fluctuations in the price of Binance's token (BNB), trading volumes and flows on the exchange, as well as the wider implications for the cryptocurrency industry and the regulatory landscape.
Binance Outflows and Regulatory Impacts
We have unsurprisingly seen outflows from Binance across major assets; BTC, ETH, USDT, USDC. Since the official DoJ announcement, which occurred at 7pm UTC on 21/11/23, we have observed an aggregated ~$800m of outflows across specified assets.
Contrasting with the crisis experienced by exchanges like FTX, Binance has demonstrated greater resilience in its net flows. During the FTX crisis on November 11, 2023, Binance witnessed an outflow of close to $1 billion in Bitcoin within a single hour. This comparison highlights the market's perception of risk, potentially influenced by new compliance requirements imposed on Binance by the US government, offering some assurance to investors and reducing counterparty risk.
BNB's Open Interest
The speculation caused by pre-announcements created a significant spike in BNB’s open interest (OI) leading up to the event, with over $100m in OI added within a 1 day period. Interestingly, the current OI has remained close to its highs, indicating further speculation on BNB specifically.
About CCData
CCData is an FCA-authorised benchmark administrator and global leader in digital asset data, providing institutional-grade digital asset data and settlement indices. By aggregating and analysing tick data from globally recognised exchanges and seamlessly integrating multiple datasets, CCData provides a comprehensive and granular overview of the market across trade, derivatives, order book, historical, social and blockchain data.
