Binance’s fund outflows lower than expected, new CEO vows to be stronger than ever before.

Binance's Outflow Funds Less than Anticipated, New CEO Pledges Stronger Recovery Than Ever.

Source: Binance Tech

On November 27th, Richard Teng, the new CEO of Binance, published his first blog post on the official Binance blog, just six days after reaching a settlement with multiple U.S. regulatory agencies.

On November 21st, Binance agreed to pay a fine of $4.3 billion and CEO Zhao Changpeng (CZ) stepped down, bringing an end to investigations by the U.S. Department of Justice, the Commodity Futures Trading Commission, and other agencies. Richard Teng, the former Head of Global Market for Binance, took over as CEO.

Will Binance, the world’s largest cryptocurrency exchange, fall from grace in the post-“CZ era”? “In fact, we are stronger today than ever before,” Richard confidently stated in his first blog post.

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At least the data seems to provide him with confidence. Less than a week after the incident, some third-party data related to Binance is surpassing market expectations.

According to blockchain data platform Nansen, the total assets in Binance wallets on the chain amount to $63.504 billion, a slight increase compared to the $64.519 billion reported on the first day of the incident. DeFiLlama data shows that the TVL (total value locked) on the BNBChain within the Binance ecosystem remains around $2.94 billion, with little change in the past week. The daily decrease rate of Gas BNB has also narrowed from 10% on the day of the incident to 2%.

Regardless of how the “RT era” unfolds, Binance’s resilience will lay the foundation for its new leader, and Teng has embedded three key words in his 850-word blog post: stability, growth, and compliance.

Funds Flowing into Binance on the Rise

If we summarize Richard Teng’s blog post, it can be simplified as follows: Binance users’ assets remain secure, financial strength remains unaffected, user growth continues, and collaboration with regulators leads to compliance.

Data is likely the reason why Richard confidently makes these two points.

According to the DeFiLlama website, on November 22nd, due to the incident, $1.268 billion flowed out of Binance exchange. However, this did not affect the total assets in Binance wallets on the chain. Third-party cryptocurrency data website Nansen disclosed that the total assets in Binance wallets on the chain were $63.504 billion on the first day of the incident. As of now, six days have passed, and the total assets in Binance wallets on the chain have increased slightly to $64.519 billion.

In addition, according to Tokeninsight data, Binance’s 24-hour spot and derivative trading volume has remained stable in the past week, with $36.05 billion on November 27th.

Binance’s 24-hour spot and derivative trading volume (Tokeninsight)

According to research firm Bernstein, Binance’s customer fund outflow is lower than expected, “indicating that its international clients still maintain continuous trust in it, and Binance’s market position is stable.”

In addition to its centralized business, Binance’s on-chain business within its ecosystem has also been unaffected by the incident. According to DeFiLlama, the TVL on the BNBChain within the Binance ecosystem remains around $2.94 billion, with little change in the past week.

The only thing that should be affected is the price of BNB, the gas token on the BNBChain. Stimulated by the event, BNB experienced a 10% drop on November 21st, which narrowed down to 2% by November 27th, with a closing price of $227.42.

Such data performance has exceeded the expectations of many industry practitioners. Analysts from Matrixport predict that Binance may not only recover, but also experience significant growth. “The settlement with multiple US regulatory bodies marks the end of long-term legal uncertainty for Binance.”

In addition to third-party data, Binance’s internal data also supports Richard Teng’s statement of “maintaining growth.”

On November 14th, Binance’s publicly available Proof of Reserves (POR) data showed a current BTC on-chain reserve of 609,310.54 BTC, with a user net balance of 584,659.077 BTC and a reserve ratio of 104.22%. Currently, the POR system provided by Binance shows that the reserve ratios of the other 31 digital assets are all above 100%.

Binance’s Proof of Reserves system (POR) shows that the reserve ratios of its 32 assets all exceed 100%.

In his blog post, Richard also mentioned Binance’s “Secure Asset Fund for Users” (SAFU), which protects user assets in extreme cases. Currently, the BTC account address of the fund shows a value of $602 million, with the BNB and USDT account values totaling $309 million.

“Rest assured, your assets are safe.” This statement by Richard, at least in terms of Binance’s asset reserves, has been validated. He emphasizes that Binance has no debt in its capital structure, its expenses are within a reasonable range, and it still has substantial income and profits.

Regulation good for Binance and the industry?

After this event, many industry insiders pointed out that the world’s largest exchange, Binance, being subject to regulation has somewhat cleared regulatory obstacles for the market.

On November 23rd, JPMorgan stated in a research report that Binance’s settlement with the US government is positive for the crypto industry and exchanges. The report notes that the exchange’s trades “will significantly reduce potential systemic risk” for the broader market.

Sam Callahan, Chief Analyst at crypto financial services company Swan Bitcoin, also agrees with this stance, stating that the settlement is a signal for the crypto industry to mature and progress on a more stable foundation.

Mike Novogratz, CEO of digital asset investment firm Galaxy Digital, also directly points out that Binance’s settlement agreement is a “major positive” for the cryptocurrency industry.

Binance’s rapid accumulation in its early stages laid a strong market foundation, but now it has also paid the price for its earlier aggressiveness. Fortunately, the new leader Richard Teng has abundant regulatory experience, and industry insiders welcome the arrival of the “RT era” at Binance. Some even believe that this is crucial for the approval of the next big step for the crypto industry, the Bitcoin ETF.

Currently, several companies such as BlackRock, Fidelity, and Franklin Templeton are working to launch Bitcoin spot ETFs in the United States. Once officially approved, the issuers will need to acquire Bitcoin from the market. Although most companies applying for the funds typically reach agreements with Coinbase, the process of determining the universal asset price (discovery price) mainly occurs on Binance.

“Coinbase is not the world’s largest crypto liquidity platform, Binance is,” says Michael Rinko, an analyst at research firm Delphi Digital. “So how can they approve any ETF if regulators are actively investigating Binance?” Rinko predicts that a resolution between U.S. regulators and Binance may be the final step needed to approve a Bitcoin spot ETF.

New CEO Emphasizes “Collaboration with Policymakers”

“We have turned the page on the historical challenges faced by Binance, and in fact, we are stronger today than ever before,” Richard repeatedly emphasizes the importance of regulatory cooperation and moving towards compliance for Binance’s development in his new blog post.

He revealed that over the past two years, Binance has recruited, hired, and retained suitable personnel to strengthen their compliance plan and culture, systematically addressing past compliance issues.

According to information publicly disclosed by Binance on November 21st, the company’s new leadership will oversee a compliance team consisting of over 60 individuals who have previously worked in law enforcement or regulatory agencies, as well as hundreds of compliance professionals holding various certifications, including AML experts. In addition to the core compliance team, Binance has also hired hundreds of operations, product, and technology personnel to support the company’s compliance plan development and execution.

Richard emphasizes the commitment to compliance, which is not only related to the current Binance incident but also his own professional experience.

Richard Teng revealed that Binance has recruited, hired, and retained suitable personnel to address past compliance issues.

Richard, 52 years old, is Singaporean and has worked at the Monetary Authority of Singapore (MAS) for 13 years.

The Monetary Authority of Singapore is a government agency that exercises central banking functions in Singapore and is also the regulatory authority responsible for overseeing financial institutions. During his tenure, Richard had regulatory experience in the banking, insurance, and capital market sectors. He was involved in the extensive reforms of the Singapore financial services industry in the late 1990s, leading the development of the private banking and capital market segments. Furthermore, he led the formulation and implementation of the Securities and Futures Act and established regulatory frameworks for real estate investment trusts (REITs), business trusts, and trust companies.

From September 2007 to February 2015, Richard held various senior positions at the Singapore Exchange (SGX), with his final position being Chief Regulatory Officer of the exchange. After leaving SGX, he joined the Abu Dhabi Global Market (ADGM) as CEO, where he served for a total of six years.

Richard joined Binance in August 2021 and served as the CEO for the Singapore region. Shortly after, he took charge of the Middle East and North Africa regions, as well as the European region. Eventually, he became the head of Binance’s regional markets, responsible for all regions outside the United States.

This manager, who has extensive experience in regulatory policies, has always emphasized the benefits of collaboration with policy makers in his public statements after joining Binance.

In September of this year, during an interview at Token 2049 in Singapore, Richard stated, “It is important to remember that our interests align very well with decision makers and regulatory authorities. What are these interests? The health of the market, user protection, and platform security. If you focus on these things, you will be addressing the concerns of policy makers and regulatory authorities.”

He also understands the interests of regulators, stating, “They want to see economic growth, and they want to see new talent emerging in this field. So, once again, it is crucial to understand their perspective, understand your own needs, and engage in effective communication.”

Richard’s views on the crypto industry in the past align with his statements since taking over at Binance, indicating that compliance will be an important focus during his tenure.

The era of CZ has passed, and the era of Richard begins. Regardless of the methods this new leader will employ to lead Binance, Binance 2.0 has already set the tone for the cryptocurrency industry: even the largest cryptocurrency exchange in the world must exercise caution in the face of regulatory scrutiny and take responsibility for cryptocurrency consumers. Who can escape this main theme?

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