CZ Binance News – Will BNB Price Plummet Further After Changpeng Zhao’s Exit?
On November 21, 2023, the renowned CEO of Binance, Changpeng Zhao, stepped down from his position, taking responsibility for the latest charges brought forward by the US Department of Justice. Naturally, the fate of Binance and its native token, BNB, hangs in the balance after such massive events. What do these changes mean for the short and long term future of the BNB token? Let’s dive in.
Why Is Binance Coin Important?
Binance is currently the largest crypto trading platform in the entire cryptocurrency industry. Binance boasts more than 350 crypto pairings and accommodates up to 60% of all spot trading activities within the field. Thus, Binance is not just the number one trading platform in the world. It is arguably the most critical company after Bitcoin, ensuring the stability of crypto trading activities.
Binance coin was issued in 2017 as an Ethereum-based token to facilitate gas fee payments and other activities on the platform. Binance also used this token to acquire liquidity in the crypto market. Initially, the coin ran on ERC-20 protocol, but Binance soon transitioned the BNB token into its native system in 2020.
The BNB token has enjoyed a healthy expansion in recent years, moving by bearish and bullish markets but not losing too much steam during the two crypto winters in 2018 and 2022. However, the 2023 period has been rocky for the Binance coin due to the increased regulatory scrutiny and several important lawsuits initiated against the company management. Let’s take a look at the USD-BNB chart in the present calendar year:
Understanding The Binance Announcement Regarding The CEO, Changpeng Zhao
In 2023, the SEC and the US Department of Justice filed several lawsuits against Binance on the grounds that the company was negligently allowing massive money laundering practices. One of the biggest charges was the accusation that Binance unwittingly helped the funnelling of the funds to Hamas, a well-known terrorist organisation residing in the Palestinian region.
After the excruciating court battle that lasted several months, Binance’s CEO, Changpeng Zhao (CZ), finally decided to plead guilty to all charges and settle the case to avoid further complications. The company has been fined $ 4.3 billion and could be booted out of the US jurisdiction. CZ himself has to pay fines of $200 million, which is not a material sum considering his $10 billion net worth.
The Immediate Monetary Impact On BNB
While significant, the fines are the least of Binance’s worries in the controversial CZ Binance news, as the lawsuit’s outcome has triggered an adverse reaction from the market participants. The BNB’s global price has suffered tremendously due to Changpeng Zhao stepping down and Binance effectively admitting their guild in all alleged charges. The entire situation closely mirrors the downfall of FTX, where the initial disclosure of unlawful activities started a chain reaction across the free market.
The BNB’s global price dropped from $306 to $235 in early June of 2023, when the lawsuits entered a serious phase. Thus, BnB’s price has been dropping for several months now. Surprisingly, the last three days have not been especially tough on the BNB token, as it has only slipped by $7 in valuation, going from $242 to $235. Considering the circumstances, this is quite a small drop, but many experts believe that the effects of the lawsuit will be much heavier than the initial metrics suggest.
The expected drop is foreshadowed by liquidating over $3 million of position trades within an hour of the CEO and lawsuit announcements. The funding rates have also dropped significantly, which indicates that the BNB token might be heading for a bearish period and could go as low as $200 in the coming months.
BNB Price Prediction – Will Binance Go Bankrupt?
While the situation seems quite dire with the recent CZ Binance news, all is not lost with BNB’s price projections. First, Changpeng Zhao’s position has been filled by Richard Teng, renowned for his regulatory prowess. He has previously served as a chief regulatory officer of the Singapore Exchange, one of the biggest and most transparent exchanges in the entire market.
Thus, Teng’s in-depth knowledge of the regulatory field can tremendously help Binance to right the ship during these volatile events. If Teng manages to clear up the current mess and regain the public’s trust in the coming months, we could see a significant trend reversal in BNB’s pricing, mainly USD to BNB pairings.
Everything has to start with issuing transparent Binance financial statements at the end of the fiscal year to establish a precedent of legitimacy and compliance in the future. It will be fascinating to see if Teng’s presence will be enough to overpower the adverse chain reaction started by the departure of Changpeng Zhao.
