Binance Sees Outflows With BNB, Altcoins Down After Plea Deal

David Pan, Bloomberg News

The Binance website on a smartphone arranged in the Brooklyn borough of New York, US, on Tuesday, Feb. 14, 2023. The New York State Department of Financial Services said it had directed Paxos Trust Co. to stop issuing new tokens of crypto's third largest stablecoin, a Binance-branded coin known as BUSD that has roughly $16 billion in circulation. , Bloomberg

(Bloomberg) -- Binance’s native token BNB and a range of smaller cryptocurrencies declined with Changpeng Zhao stepping down from the largest digital-asset exchange under a sweeping deal worked out with the US Justice Department.

Binance also agreed to plead guilty to criminal charges and pay a $4.3 billion fine, according to people familiar with the matter. The settlement also includes the Treasury Department and the Commodity Futures Trading Commission. The deal ends a years-long investigation into the cryptocurrency exchange.

“The market has responded negatively in the short term to the Binance news,” said Greg Moritz, co-founder and chief operating officer at crypto hedge fund AltTab Capital.

BNB is the native token of the Binance exchange as well as BNB Chain, a blockchain Binance started. It fell as much as 6.3% to $237.48. Solana and Polygon were down by 6% and 8%, respectively. So-called altcoins are among the most traded tokens on Binance.

“There was an initial reaction to the news where liquidity dropped 40%, but in the past hour liquidity has showed signs of returning to normal,” said Riyad Carey, research analyst at Kaiko.

Users appear to be pulling funds from Binance, data tracker Nansen said.

Meanwhile, declines were lower for Bitcoin and Ether, which are the two largest cryptocurrencies and generally less volatile than smaller digital tokens.