Binance Exodus: Crypto investors withdraw nearly $1 billion from Binance after CEO pleaded guilty to fraud
Binance, the world’s largest cryptocurrency exchange, is facing a mass exodus of customers following a guilty plea by the company’s founder and former CEO Changpeng Zhao (CZ), Zhao.
The fallout started after crypto investors pulled out about $956 million from Binance over the past 24 hours, Reuters reported, citing data firm Nansen on Wednesday. Nansen also analysts clarified that the data covers transactions on the Ethereum blockchain. Binance has yet to respond to Reuters’ request for comment.
The news comes just a day after CZ stepped down and pleaded guilty to breaking U.S. anti-money laundering laws. On Tuesday, CZ pleaded guilty to violating criminal U.S. anti-money laundering (AML) requirements. As part of the resolution, CZ reportedly agreed to pay fines of $4.3 billion, to cover settlements for civil allegations brought forth by regulators.
“Binance founder Changpeng Zhao agrees to step down, plead guilty. Zhao’s crypto exchange will also admit wrongdoing and agree to pay $4.3 billion in fines,” the Wall Street Journal reported.
In June, the Securities and Exchange Commission (SEC) filed a lawsuit against Binance and its founder, CZ, alleging that they were involved in an “elaborate scheme to evade U.S. federal securities laws.” Binance, in response, refuted the SEC’s accusations and said that would “vigorously defend” the integrity of its platform.
CZ founded Binance in 2017 with Yi He. The cryptocurrency exchange platform combines digital technology and finance. The company provides access to exchange digital currency pairs on the market while maintaining security, and liquidity, enabling a safe and efficient deal with anyone, anytime and anywhere.
Before founding Binance, CEO Changpeng Zhao previously founded Fusion Systems in 2005 in Shanghai; the company that built high-frequency trading systems for brokers. In 2013 he joined Blockchain.info as the third member of the cryptocurrency wallet’s team. He also worked at OKCoin as CTO for less than a year, a platform for spot trading between fiat and digital assets.