Binance’s bitcoin reserves have been drained by $200 million as a result of the crypto exchange and its ex-CEO Changpeng Zhao (CZ) pleading guilty to federal charges in the United States – while CZ has posted bond, prosecutors are trying to keep him in the country until he is sentenced.
On-chain data reveals that large quantities of bitcoin are migrating from Binance to Coinbase, according to CryptoQuant. Binance has reduced its bitcoin reserves by 5,000 BTC ($187 million). Coinbase’s reserves have increased by 12,000 BTC ($450 million).
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According to the Securities and Exchange Commission (SEC) and other crypto analysts, Binance has previously utilized its bitcoin reserves to push up the price of its own asset, BNB. Both CZ and Binance strongly refute the allegations.
Following the announcement of the settlement and CZ’s retirement, the price of BNB fell by 14%, from $264 to $227. It was $233 at press time, down 20% from this time last year.
CZ owns a sizable portion of BNB’s $35 billion market capitalization. Binance’s recent $4 billion transaction resolved several US agency allegations, but the SEC’s wash trading charges remain unresolved.
Protos study revealed discrepancies in the amount of BNB owned by Binance in its’proof-of-reserves,’ implying that the crypto exchange possessed significantly more than it was willing to disclose.
CZ faces detention in the US juxtaposed to Binance bitcoin losses
Prosecutors in the United States are arguing for CZ to be imprisoned in the country rather than allowed to return to his residence in Dubai before his February sentencing. For his involvement in failing to execute sufficient anti-money laundering measures, the former CEO faces up to 18 months in prison.
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Following his guilty plea, the 46-year-old paid a $175 million release bail. Prosecutors, however, believe that CZ poses a “unacceptable” flight risk because if he is permitted to leave the country, he may not return, and the government “would not be able to secure his return.” The United States and the United Arab Emirates do not have an extradition treaty.
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“Zhao’s significant assets and strong ties to the UAE, as well as the government’s inability to extradite him from the UAE, favor a ruling from this court that he be required to remain in the United States until his sentencing on February 23, 2024,” the prosecutor’s office said.
Furthermore, the vast majority of CZ’s wealth is not in the US, giving CZ no reason to return. According to the motion, the $175 million bond he paid is essentially inaccessible to the government.
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