Trust in Binance is falling?
Is trust in Binance declining after founder CZ resigns and faces a $4.3 billion fine? Media reports on an alleged decay. However, no special features can be identified using the example of the world market leader. In fact, the overall trading volume on the crypto market is currently falling.
Trust in Binance is falling? That’s how drastically the stock market really loses
Is trust in the world’s largest crypto exchange Binance currently declining ? The company recently agreed to pay a penalty of $4.3 billion to US authorities. Company founder Changpeng Zhao was found guilty of money laundering and sanctions evasion.
Additionally, the crypto mogul announced that he would be stepping down from his position as CEO of Binance. In the crypto industry, this development seems to be causing concern amongst investors. In fact, raw numbers initially indicate a loss of importance for Binance.
At second glance, however, this trend cannot be determined with certainty. After CZ leaves his post, the customer funds under management fall significantly. In the weekly trend , data aggregator Nansen currently lists inflows of eight billion US dollars to Binance.
In the same period, however, $8.8 billion was also lost. Accordingly, Binance now manages $800 million less. However, the crypto exchange still manages a total of $66.4 billion in different cryptocurrencies. So far, the total volume has only fallen by 1.2 percent.
Trading volume on the crypto market is falling significantly
The trading volume on the crypto market is falling significantly. However, it is not just Binance that is affected, but the entire industry. As data from CoinMarketCap shows, all crypto exchanges are recording an almost identical trend.
The ten most popular crypto exchanges according to CoinMarketCap. The graph on the right shows a general downwards trend in trading volume.
The total trading volume has already fallen by 30 percent in the last 24 hours and has a daily value of 38.7 billion US dollars at the time of going to press.
There has been no noticeable loss of market share for Binance over the last few days. However, in 2023, the global market leader really saw a decline in popularity, as Kaiko reports .
This was due to increasing disputes with US authorities and other regulators around the world. A temporary waiver of trading fees when trading Bitcoin also expired.
Several experts have already expressed the suspicion that Binance now has a secure footing after the agreement with the USA. Accordingly, user trust in the crypto exchange is likely to increase instead of decreasing.
The crypto service provider Matrixport is convinced of this. In an analysis , the company explains that the conflict between the USA and the crypto industry has improved. The much-anticipated crypto funds will also benefit from this situation, they explain.
Binance remains in a critical situation
Robert Le, analyst at PitchBooks, sees it completely differently. The expert believes: Binance is still in a critical situation. It points to a lawsuit filed by the US Securities and Exchange Commission in June. So far no verdict has been reached.
“Binance is not quite out of the woods yet. The ongoing civil litigation with the SEC remains a concern for the exchange, which will likely lead to further fines,” explains Le.
Changpeng Zhao, who wants to continue to advise his company, could also face imprisonment. If the court sentences the Chinese man to up to one and a half years in prison, he will not appeal the verdict, he has already announced, according to Reuters .
CZ remains free pending sentencing in the case, having paid $175 million in bail. A $15 million bond remains in custody until his return to the United States. The 46-year-old lives in the United Arab Emirates.