Binance users has pulled over US$1 billion from the cryptocurrency exchange since the founder and CEO Changpeng Zhao stepped down on Tuesday. The US$1 billion outflow is exclusive of the Bitcoins transferred out of the exchange.
Binance chief Changpeng Zhao had on Tuesday pleaded guilty to breaking U.S. anti-money laundering laws as part of a $4.3 billion settlement resolving a years-long probe into the world’s largest crypto exchange, prosecutors said on Tuesday.
The deal, which will see Zhao personally pay $50 million, was described by prosecutors as one of the largest corporate penalties in U.S. history.
The Zhao plea comes on the heels of the recent fraud conviction of FTX founder Sam Bankman-Fried, striking another blow to the crypto industry.
Following the withdrawals, CNBC reported that liquidity dropped by 25% over the same time frame as market makers pull back their positions, citing data provider Kaiko.
The outflows being experienced by Binance though significant are close to what happened previously when the exchange and its founder were charged with 13 securities violations by the US Securities and Exchange Commission (SEC).
BNB which is the exchange’s native token dropped by more than 8% following the plea by Zhao.
Binance remains the world’s largest crypto exchange globally, processing billions of dollars in trading volume every year.
Binance started seeing drops in its share of all spot trading after it phased out zero-fee trading of crypto asset pairs including bitcoin, a key incentive for customers.
Assets of more than $65 billion remain on the Binance platform, meaning that Binance is likely capitalized enough to withstand a sudden rush of investors away from the platform.
Nnamdi Maduakor is a Writer, Investor and Entrepreneur