Binance’s Historic $4.3B Settlement Shakes the Crypto World

CZ Steps Down Amidst Record Penalty. BNB Retreats from Lows.

Binance has reached a settlement of $4.3 billion for breaching sanctions and laws related to money transmission, marking this as one of the highest corporate fines on record. The company’s founder, Changpeng “CZ” Zhao, admitted guilt and resigned as CEO.

Documents recently made public reveal that Binance unlawfully depended on American clients for substantial income and trade, with a criminal charge exposing persistent non-compliance and intentional efforts to conceal these essential yet forbidden customers. CZ’s legal team announced a six-month postponement of his sentencing, with an agreement to forgo appeal rights if the term is under 18 months.

The Aftermath

Many traders view CZ’s and Binance’s predicament as potentially advantageous, possibly increasing the likelihood of the U.S. SEC sanctioning one or more Bitcoin ETFs soon. This is because the lawsuit against Binance was viewed as a source of instability and its resolution now brings a sense of calmness.

As the dust settles, Binance is viewed as a solid company, which can withstand a massive $4 billion fine. This is supported by data from crypto analysis company Nansen: following the news regarding CZ’s resignation and the $4 billion fine, Binance experienced negative netflows of $955 million. However, Binance’s net worth actually increased from $64.6 B to $65.2 B. Also, according to the same analytics firm, in the past, Binance handled bigger outflows without any problems. The instances outlined by Nansen include the initial filing of the SEC lawsuit and the collapse of the FTX exchange.

The market instability triggered by the actions against Binance and CZ has been expensive for leverage traders. Coinglass data indicates that in the 12 hours following the settlement announcement, BTC long positions worth $110 million were liquidated, against $37.2 million in short positions. Conversely, in the 24 hours before this post, liquidations at Binance were more balanced and considerably lower, with $14.38M in longs and $13.60M in shorts liquidated.

Chart Analysis – BNB/USD

BNB is currently changing hands at $234.8 after trading as low as $222.6, on Tuesday, following the Binance news. The drop was definitely triggered by the fine and CZ resignation rumors but the technical side was in agreement as well.

The RSI was overbought prior to the drop and it was showing bearish divergence. Also, the resistance zone between $255 and $260 had been tested several times.

Currently, we can see a clear bounce at the 50-day Moving Average, which may result in a rally higher. If this scenario doesn’t materialize, the next key level is $220, which acted as a good barrier in the past, both for rising and falling prices.