Binance’s On-Chain Health Details After DOJ $4.3B Settlement: CryptoQuant

The world's largest cryptocurrency exchange, Binance, has experienced a flurry of on-chain activity since it filed a $4.3 billion lawsuit with the United States Department of Justice (DOJ) in less than two weeks.

According to a report by market analysis platform CryptoQuant, Binance's reserves have gradually decreased as users continue to withdraw their assets.

Binance Reserves discount

Binance's stock fell 20% to its all-time low, marking the exchange's biggest drop in five years. The exchange's Bitcoin (BTC) reserves fell to 500,000 BTC from 634,000 BTC in May.

BTC deposit transactions on Binance also fell to new lows as the exchange saw declining user interest in moving their assets to the platform.

Binance Bitcoin spot transaction volume is not left. Last week, the figure was lower than rival exchanges Coinbase and OKX for the first time since June 2020.

The leading crypto exchange was under regulatory pressure from several regions this year. In the year The settlement with the DOJ on November 21 turned out to be one of the largest crypto settlements in US history. The exchange pleaded guilty to willfully violating the Bank Secrecy Act and failing to implement a robust anti-money laundering program on its platform.

The settlement resulted in Binance founder Changpeng Zhao (CZ) paying a $50 million fine for stepping down from his role as CEO of the company. The news of CZ's release led to a sharp increase in the number of bitcoins flowing from Binance to other exchanges, which dropped the platform's market share to 40% in a short period of time.

Binance maintains its dominance.

Despite asset declines and mass withdrawals, Binance maintained its dominance by holding the highest BTC reserves and 30-day cumulative net flows. The trading platform has regained its market share, which is back to around 50%.

By measuring the number of BTC moving from Binance to other exchanges over a long period of time, the DOJ saga triggered a small amount of assets to move from the leading platform to other trading venues.

Additionally, 30-day cumulative net foreign or foreign exchange flows remain low relative to total reserves, indicating a relatively low impact of recent news from a longer-term framework. Binance will continue to be the main exchange with the highest total Bitcoin reserves,” CryptoQuant explained.