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Binance’s problems pile on as BUSD loses market cap

2min Read

Binance’s BUSD tumbles, marking a 95% drop in supply, while legal woes deepen for CEO CZ.

Binance's problems pile on as BUSD loses market cap

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  • Binance’s BUSD faced a drastic market cap decline, falling below 1 billion in supply.
  • BUSD fell by 95% from its peak while the BNB network’s activity and revenue took a hit.

Binance [BNB] has had a very troubling 2023, with many trials rocking both the exchange and the network. Even after the new year began, many of these troubles persisted.

A slow decline in interest for BUSD

A notable setback was witnessed in Binance’s stablecoin sector on the 7th of January, exemplified by Binance’s BUSD experiencing a drastic market cap decline.

BUSD’s supply fell below 1 billion during this time frame, plummeting by 95% from its peak of 23.45 billion. At press time, BUSD stood as the sixth-largest stablecoin, trailing behind FDUSD, USDT, USDC and DAI.

 

State of the network

The repercussions extended to BNB’s network dynamics, where activity nosedived by 66.4% in the past week.

Simultaneously, network revenue witnessed a 13.7% decline over the same period, indicating a concerning trend in user engagement and economic throughput.

Source: token terminal

Legal challenges and price movement

Adding to Binance’s challenges, legal complexities emerged.

The U.S. Commodity Futures Trading Commission (CFTC) finalized a settlement with Binance’s CEO, Changpeng Zhao (CZ), imposing a $150 million civil penalty on CZ and mandating Binance to disgorge $1.35 billion in ill-gotten fees.

Former Chief Compliance Officer Samuel Lim faced a $1.5 million penalty. The court also directed the establishment of a corporate governance structure, reinforcing regulatory scrutiny.

Despite the legal hurdles and FUD, new projects continued to launch on BNB, showcasing resilience within the ecosystem.


How much are 1,10,100 BNBs worth today?


However, BNB’s market response remained adverse, trading at $295.72 with a 4.17% decline in the last 24 hours. Trading volume also experienced a recent downturn.

As Binance navigates through these challenges, the stability of its stablecoin, network engagement, and legal resolution will significantly shape its trajectory in 2024.

Source: Santiment

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Himalay is a full-time journalist at AMBCrypto. A Computer Science graduate, Himalay writes about crypto with a special focus on the latest coin-based updates. He is a fan of gonzo journalism, transgressive fiction, heavy metal, and Manchester United.
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