The crypto exchange Binance was not affected by massive capital flight last year. Since the platform came under fire from global stock market watchdogs, investors have been getting their money’s worth. Yesterday it was announced that Binance may have reached a settlement with the US Department of Justice, which in turn led to capital outflows.
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Binance continues to shrink after firing its CEO
This morning we wrote that Binance CEO Changpeng Zhao (also known as “CZ”) will be leaving his position. Yesterday there was news that this would be part of a settlement with the US Attorney’s Office, but it has not yet been confirmed that this agreement will actually materialize. In addition to the resignation, this would also mean one of the highest fines in the history of the financial world.
The trading platform appears to be suffering significantly. According to data from DefiLlama, the total amount of cryptocurrencies in Binance wallets has decreased by $2.4 billion since yesterday. At the time of writing, the total value is $67.5 billion.
“After CZ’s resignation, net capital flight remained constant,” CryptoQuant marketing director Hochan Chung told CoinDesk. “But compared to Binance’s total reserves, the total volume is not at all significant.” It is also noticeable that the total amount available to Binance has actually not changed this year. At the end of last year, it held a total of $64 billion, and panic situations also led to a large capital flight.
Liquidity on Binance is also decreasing
Perhaps even more striking is that trading on Binance has become significantly less attractive, at least for large parties. Liquidity has fallen by 25%, CoinDesk finds based on data from crypto data provider Kaiko. The 0.1% and 1% market depth for major cryptocurrencies is now just $150 million and $180 million, respectively. These metrics show how easy it is to invest large amounts of money.
According to previous research, Binance has been shrinking for quite some time. Last year the company accounted for more than half of the total crypto market, now it is less than half. This will be partly due to the lawsuits with the American government, but also because the company has had to leave numerous countries.
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