Investors have pulled over $956m from crypto exchange Binance after its former CEO, Changpeng Zhao, pleaded guilty to money laundering charges, according to market data from the last 24 hours.
Zhao stepped down as Binance’s CEO soon after pleading guilty, he has since been replaced by Richard Teng who joined the exchange in 2021.
The US Department of Justice (DOJ) has been investigating Binance’s role in allowing its users to send money across the world and bypass controls and sanctions. A spokesperson for the DOJ stated that over $900m has been sent between US and Iranian users through Binance.
“[Binance] facilitated millions of dollars in transactions between US users and users in Syria, and in the Russian occupied Ukrainian regions of Crimea, Donetsk and Luhansk,” they stated.
Furthermore, the DOJ also stated that Binance has enabled transactions between criminals and terrorists around the world, including Hydra a Russian dark web marketplace.
“Between August 2017 and April 2022, there were direct transfers of approximately $106m in bitcoin to Binance.com wallets from Hydra,” the DOJ spokesperson said.
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Alongside losing its CEO, Binance is also facing a $4.3bn fine from the DOJ.
With over 150 million users, Binance is currently the largest global cryptocurrency exchange. FTX, formerly the second largest exchange filed for bankruptcy on 11 November 2022 after a liquidity crisis following revelations of fraudulent activity at the company.
In its 2023 thematic intelligence report into the cryptocurrency industry, research analyst company GlobalData described crypto as the most “polarising” industry in tech.
“For proponents, crypto represents an opportunity for significant wealth accumulation through value appreciation or new services like decentralized lending,” the report reads, “Conversely, critics contend that the fundamental question of whether cryptocurrencies have any inherent value remains unanswered.”
Decentralisation remains a core feature of cryptocurrency.
GlobalData notes that true decentralisation remains an aspiration within the industry rather than a standard. Binance itself is a centralised exchange for cryptocurrency.
Interplay between centralised and decentralised technology is crucial to provide the crypto industry with some stability and infrastructure.