The broader cryptocurrency market reacted to the news of Changpeng ‘CZ’ Zhao’s departure from Binance by liquidating almost $175million of long position trades.
Data from crypto derivatives data platform CoinGlass revealed that traders betting on long positions liquidated close to $175m worth of crypto in the last 24 hours. Short positions liquidated, on the other hand, stood at $55m for the same timeframe.
In total, the market liquidated about $230m in crypto assets over the last day. According to the same data platform, 92,972 traders were purged in the last 24 hours and the largest single liquidation order happened on Bybit – BTCUSD value $2.35m.
All of this happened in the backdrop of the recent turn of events at Binance which led to CZ’s resignation from the top position of the exchange’s CEO. This was after he pleaded guilty to violating Anti-Money Laundering laws in his case with the US Department of Justice (DoJ).
As stated by Attorney General Merrick Garland, Binance’s policies allowed criminals involved in illicit activities to move “stolen funds” through the exchange. According to him, the exchange “pretended to comply” with US federal laws by offering paths for certain users to access Binance despite their ties to illicit funds.
The DoJ also announced a $4.3billion settlement with the exchange where about $3.4bn will go in penalties to the Financial Crimes Enforcement Network and roughly $1bn to the Treasury’s Office of Foreign Assets Control.
The crypto exchange responded to this by saying that it was “pleased” to have reached the resolution with authorities. It also claimed to have “never faltered in upholding [its] core values of user security and safety”.
Its CEO, on the other hand, pleaded guilty to making mistakes in his official statement on X (formerly Twitter). He also announced the appointment of the new CEO, Richard Teng, who was formerly the CEO at Financial Services Regulatory Authority at Abu Dhabi Global Market (ADGM), chief regulatory officer of the Singapore Exchange (SGX) and director of Corporate Finance in the Monetary Authority of Singapore.
Talking about Teng, CZ said: “Richard is a highly qualified leader and, with over three decades of financial services and regulatory experience, he will navigate the company through its next period of growth. He will ensure Binance delivers on our next phase of security, transparency, compliance, and growth.”
Liquidation was not the only aspect that took a hit in the market following the recent developments at the world’s largest crypto exchange. The news also seemed to affect the flow of crypto assets into the Binance exchange.
According to data aggregator DefiLlama, inflows into Binance’s exchange asset have fallen by over $1bn in the last 24 hours. As per market movements, some traders were also seen to have stopped depositing their assets on there for the time being.
Binance’s native cryptocurrency $BNB also seemed to face the repercussions as it declined by over 9% in the last 24 hours. It now changed hands for a weekly low of $234, trading red on its charts.
