Binance sees $1bn outflows after CEO resigns

Binance, the crypto exchange founded in China, has seen investors pull close to US$1 billion from the platform following the resignation of its chief executive Changpeng Zhao. His departure came after he pleaded guilty to money laundering charges from the US Department of Justice. According to the charges, Binance enabled nearly $900 million in transactions between US and Iranian as well as millions more in transactions between US users and users in Syria and Russian-occupied areas of Ukraine. “Using new technology to break the law does not make you a disruptor. It makes you a criminal,” said US Attorney General Merrick Garland. “Binance prioritized its profits over the safety of the American people.” In a statement issued on social media, Zhao said: "I made mistakes, and I must take responsibility. This is best for our community, for Binance, and for myself". Binance, which is registered in the Cayman Islands, has also been ordered to pay $4.3 billion in penalties and forfeitures. But it remains to be seen how badly the platform will be affected by outflows. In the 24 hours following Zhao’s departure, $956 million was pulled by investors. The exchange still has an estimated $65 billion on its platform but it is also facing more charges in the US. The Securities and Exchanges Commission has alleged that Binance ran an unregistered securities exchange and mixed billions of investors’ cash with a separate trading firm run by Zhao, charges that are largely the same as the ones levelled at FTX barely a year ago. ©2023 funds global asia

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