Bitcoin and Binance Token Dip as CZ is Released

Key Highlights

• Changpeng Zhao was released early from custody on September 27.
• Bitcoin (BTC) and Binance’s BNB (BNB) token experienced slight price dips following the news.
• Zhao’s significant holdings of BNB raise concerns about token centralization.

Zhao’s Wealth and BNB Holdings

According to a Forbes report, Changpeng Zhao holds 64% of the total BNB supply, positioning his net worth at approximately $61 billion as of June 2024. This made him the 24th richest person in the world at that time. Zhao’s vast holdings of Binance’s native currency have sparked concerns regarding the centralization of BNB.

Currently, the 94 million BNB tokens held by Zhao represent roughly $57 billion in value, a significant decrease from the prices observed in June 2024, where BNB topped $700.

Allocation of BNB Tokens

A 2024 analysis by Gray Wolf Analytics and Forbes revealed that initially, 80 million BNB tokens were allocated to the original Binance team. Additionally, Binance still retains around 46 million of those tokens, contributing to concerns about the token’s distribution.

Impact of DOJ Charges and Settlements on BNB Price

In 2023, the United States Department of Justice (DOJ) announced charges against Binance and Zhao, alleging violations of the Bank Secrecy Act. A joint statement from several U.S. regulatory bodies indicated the significance of news related to Zhao and Binance’s liabilities:

“While Binance is not a publicly traded company, Binance is the largest cryptocurrency exchange in the world, and news related to Zhao and Binance’s criminal and civil liability is likely to have a significant effect on trading of various cryptocurrencies.”

This prediction proved accurate, as on November 21, the price of BNB surged by approximately 7% within 24 hours following news of a $4 billion settlement with the Securities and Exchange Commission (SEC).

Financial Repercussions of the Settlement

The SEC settlement ultimately cost Binance $4.3 billion, with Zhao personally fined an additional $50 million. Furthermore, the DOJ mandated that Binance implement independent monitoring over the next three years, appointing the Forensic Risk Alliance to oversee the company’s operations.

Conclusion

Changpeng Zhao’s early release from custody has stirred both excitement and concern within the cryptocurrency community. As Bitcoin and BNB prices react to his release and the implications of regulatory challenges, the future of Binance remains closely watched by investors and analysts alike.