The latest moves in crypto markets, in context By Lyllah Ledesma, CoinDesk markets reporter Was this newsletter forwarded to you? Sign up here. |
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Happy Wednesday! Here’s what you need to know today in crypto: |
- Binance’s founder CZ pleaded guilty in Seattle to charges he personally faced and agreed to pay a fine.
- The exchange relied on U.S. customers in the early days for the bulk of its revenue, which was illegal.
- Binance witnessed over $950 million in net outflows over the past 24 hours.
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CoinDesk Market Index (CMI): 1,438 −1.3%
Bitcoin (BTC): $36,544 −1.8%
Ether (ETC): $2,019 +0.5%
S&P 500: 4,538.19 −0.2%
Gold: $2,003 +0.2%
Nikkei 225: $2,003 +0.2% |
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Binance, the world's largest crypto exchange, was criminally charged with breaking sanctions and money-transmitting laws and agreed to a $4.3 billion settlement in "one of the largest penalties" the U.S. has ever obtained from a corporate defendant. Founder Changpeng "CZ" Zhao pleaded guilty in Seattle to charges he personally faced, agreeing to pay a $50 million fine and step down as CEO. Richard Teng, a former Abu Dhabi regulator and later Binance's regional markets head, will replace him. Binance was accused of failing to maintain a proper anti-money laundering program, operating an unlicensed money-transmitting business and violating sanctions law, according to a court filing unsealed on Tuesday. |
Binance's initial growth was illegally fueled by its U.S. clients, the charging document alleged. In its early days, the exchange relied on Americans for the bulk of its revenue, its trading activity and thus its status as the world's largest crypto exchange. The filing details years of compliance failures and obfuscation in the name of protecting those most valuable – and off-limits – users. But servicing those customers wasn't legal because Binance wasn't a registered U.S. business, according to the government. Binance targeted growth in the country, especially among "VIP" users who drove the exchange's trading volume and thus its revenue, helping it become a crypto-trading juggernaut. According to the government, Binance's executives "tracked and monitored" the exchange's U.S. performance and even touted their success. As much as 30% of the exchange's web traffic (and just as much revenue) originated in the U.S. in early 2018, the filing said. Following the news, Binance saw over $950 million in net outflows over the past 24 hours. “There are constant hourly net outflows of bitcoin and stablecoins after the CZ's resignation announcement,” Hochan Chung, head of marketing at CryptoQuant, told CoinDesk. “However, compared to the total reserves of Binance, the current volume is not yet significant at all.” Binance is set to continue operating as usual and make a "complete exit" from the U.S market. The withdrawals are above average, but not unusually large on a weekly basis, an analysis of net hourly flows from CryptoQuant shows. Data from a Dune Analytics dashboard shows over $2.37 billion in various tokens left the exchange and some $1.78 billion in tokens were deposited. |
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Market Insight: Crypto Traders Load Up on Bitcoin Topside Option Plays |
According to over-the-counter institutional cryptocurrency trading network Paradigm, the options market has increased activity in topside bitcoin call options in the aftermath of the Binance news, a sign of persistent bullish sentiment. "In the options space, after the initial two-way flow, we have seen interest in loading up more topside with strong demand for the March 2024 expiry calls," Patrick Chu, head of institutional sales coverage at Paradigm, told CoinDesk. Data shared by market analyst Chang shows that early Wednesday, market participants traded 550 contracts of BTC $45,000 strike call option expiring in March 2024 on Deribit. Buyers, expecting a continued price rally in bitcoin in the coming months, paid a cumulative premium of $1.5 million for the bullish bets. On Deribit, one options contract represents one BTC. |
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- The chart shows the number of YFI held in wallets tied to centralized cryptocurrency exchanges and YFI's price since early October. YFI is the native token of the Yearn Finance ecosystem.
- The exchange balance surged in the four days to Nov. 14. YFI's price topped on Nov.17 and has crashed 50% since then.
- The data highlights the importance of tracking exchange inflows as a barometer of potential increase in selling pressure.
- Source: Coinglass
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Disclaimer: The information presented in this message is intended as a news item that provides a brief summary of various events and developments that affect, or that might in the future affect, the value of one or more of the cryptocurrencies described above. The information contained in this message, and any information liked through the items contained herein, is not intended to provide sufficient information to form the basis for an investment decision. The information presented herein is accurate only as of its date, and it was not prepared by a research analyst or other investment professional. You should seek additional information regarding the merits and risks of investing in any cryptocurrency before deciding to purchase or sell any such instruments. |
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