Crypto News: The Markets React to the Binance News and the Departure of CZ

Key Insights:

• Binance CEO CZ steps down as part of the resolution of charges against Binance.
• The crypto market cap fell by 4.66% on Tuesday, a modest loss considering a $4 billion payment for charges against Binance.
• BTC and ETH responded to the news but are in positive territory during early Wednesday trading.

Binance Pays $4 Billion and CZ Steps Down as CEO

On Tuesday, the US Department of Justice announced a resolution of its case against Binance and Binance CEO CZ.

According to the press release, Binance admitted to engaging in anti-money laundering, unlicensed money transmitting, and sanction violations. As part of the guilty plea, Binance agreed to pay $4 billion for violations of the Bank Secrecy Act, failure to register as a money-transmitting business, and the International Emergency Economic Powers Act.

Binance founder and CEO CZ pled guilty to failing to maintain an effective anti-money laundering program, violating the Bank Secrecy Act. CZ resigned as CEO.

Attorney General Merrick B. Garland said,

“Binance became the world’s largest cryptocurrency exchange in part because of the crimes it committed – now it is paying one of the largest corporate penalties in US history. In just the past month, the Justice Department has successfully prosecuted the CEOs of two of the world’s largest cryptocurrency exchanges in two separate criminal cases. The message here should be clear: using new technology to break the law does not make you a disruptor, it makes you a criminal.”

Former Binance CEO CZ posted a statement on X (formerly Twitter), saying,

“Today, I stepped down as CEO of Binance. 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. Binance is no longer a baby. It is time for me to let it walk and run. I know Binance will continue to grow and excel with the deep bench it has.”

CZ introduced incoming CEO Richard Teng, formerly Binance Global Head of Regional Markets.

Market Reaction to the Binance News

On Tuesday, the total crypto market cap declined by $64.60 billion to $1,322 billion. MATIC tumbled 10.05%, while BNB slumped by 10.86%. By historical standards, the losses were relatively modest. There were no reports of withdrawal suspensions this morning to fuel fear of a collapse.

Amicus Curiae attorney John E. Deaton responded to the news, saying,

“Coinbase will be a big winner. I expect to see BlackRock and Vanguard buy more. Btw, 90% of Gary Gensler’s $120M fortune is with Vanguard. See how this works, yet?”

Coinbase CEO Brian Armstrong had this to say,

“Today’s news reinforces that doing it the hard way was the right decision. We now have an opportunity to start a new chapter for this industry. We took a lot of arrows operating here in the US due to the lack of regulatory clarity, and my hope is that today’s news serves as a catalyst to finally achieve that.”

On Tuesday, Coinbase (COIN) shares fell by just 0.57% after surging 7.12% on Monday.

Technical Analysis

Bitcoin Analysis

BTC held above the 50-day and 200-day EMAs, sending bullish price signals.

A BTC break above the $36,400 resistance level would support a move to the $37,600 resistance level and the November 9 high of $38,029.

Binance-related news and crypto-spot ETF updates will be focal points.

A fall below the $36,000 handle would bring the $35,265 support level into play.

The 14-Daily RSI reading of 54.94 indicates a BTC return to $37,000 before entering overbought territory.

Ethereum Analysis

ETH remained above the 50-day and 200-day EMAs, sending bullish price signals.

An ETH return to $2,000 would support a break above the $2,021 resistance level.

However, a fall through the $1,926 support level would bring $1,850 and the trend line into play.

The 14-period Daily RSI at 54.29 suggests an ETH move through the $2,021 resistance level before entering overbought territory.