As families in the United States warm up their homes for Thanksgiving festivities, the temperature in the cryptocurrency market seems to be moving in the opposite direction, symbolizing the financial chills that November has historically brought upon the crypto sector.
What Happened: Binance, the largest crypto exchange by trade volume, confronts a major transition. Its CEO, Changpeng Zhao—known widely as CZ—announced his resignation following a major legal settlement.
On Tuesday, the Department of Justice (DOJ) concluded what it called a “historic” settlement with Binance. Accused of wide-ranging legal infractions, Binance agreed to a penalty of $4.3 billion for breaches of money transmission laws and U.S. sanctions. In the aftermath, CZ stepped down from the exchange he launched in 2017 and nurtured into a crypto powerhouse.
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Although Binance saw withdrawals spike to $566.8 million over the past day, as reported by DefiLlama’s centralized exchange dashboard, the situation remains markedly different from the fate that befell rival FTX. Unlike FTX, whose collapse was catalyzed by misappropriated customer funds, Binance’s financial standing is reportedly stable.
The latest “proof of reserves” report—an imperfect yet voluntary disclosure of an exchange’s holdings—suggests that Binance possesses $65 billion in crypto assets. DefiLlama’s estimates put the figure slightly higher, at $68.4 billion.
Comparing November’s Crypto Crises: This November’s saga at Binance mirrors the tumult that clobbered the cryptocurrency world exactly a year ago when Sam Bankman-Fried’s FTX experienced a collapse. At that time, his exchange, FTX, halted withdrawals unexpectedly.
The connection between FTX and Alameda Research was brought to light on Nov. 2, when CoinDesk disclosed a concerning overlap in assets. The report revealed that a significant portion of Alameda’s balance sheet was tied up in FTT—the native token of FTX. This initiated a domino effect, resulting in a mass exodus from FTX and ultimately, a crisis that saw the exchange halt all withdrawals.
Adding to the gravity of November’s reputation for crypto, on November 2, 2023, Bankman-Fried was convicted of several charges of fraud and conspiracy related to FTX’s operations.
Bitcoin’s BTC/USD plummeted by 12%, dipping below the $16,000 mark in November 2022. Ethereum ETH/USD also suffered a drop of 14%, falling to $1,128.87. The market capitalization plummeted 64% from $2.31 trillion at the beginning of 2022 down to $829 billion by year’s end.
The resignation of the Binance CEO in November 2023 contributed to a 3% dip in market cap, bringing it down to $1.38 trillion. In the wake of this news, Bitcoin and Ethereum also saw declines of 3% and 2% respectively, with Bitcoin trading at $36,443 and Ethereum at $1,986, at the time of writing.
CZ’s Parting Words: CZ took to X to address his departure: "Admittedly, it was not easy to let go emotionally. But I know it is the right thing to do. I made mistakes, and I must take responsibility. This is best for our community, for Binance, and for myself," he wrote on Tuesday.
Photo by FellowNeko on Shutterstock
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