Binance Wallets Move Approximately $4 Billion in Stablecoin Ahead of DOJ Settlement

Last updated: November 23, 2023 00:47 EST
. 2 min read

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Binance wallets have moved $3.9 billion worth of Tether (USDT) in a recent transaction amid the exchange’s pending $4.3 billion penalty that it agreed to pay to the Department of Justice.

On-chain data shows that the majority of the funds were transferred from one Binance cold wallet, known as Binance-Cold 2, to another wallet called Binance 3.

Currently, the cold wallet holds a total of $6.6 billion, with $4 billion in USDT and the remainder in various stablecoins such as Decentralized USD (USDD), USDC, and TrueUSD (TUSD).

The destination wallet now holds $3.2 billion in assets, primarily consisting of Tether’s USDT stablecoin.

Binance has previously stated that its cold wallets are responsible for holding the majority of the company’s funds.

However, it remains unclear whether Binance intends to utilize these funds to settle the fine imposed by the U.S. government, or if the company plans to convert the USDT into U.S. dollars or another fiat currency.

New Binance CEO Mulls Ability to Pay $4.3 Billion Fine

As reported, new Binance CEO Richard Teng has hinted at the exchange’s ability to pay the $4.3 billion it has been fined by the US Justice Department.

Teng, who was named CEO of Binance on Tuesday after Changpeng Zhao stepped down, said in a recent post on X (formerly Twitter) that the exchange is in good shape financially.

The statement came in reply to a post by Connor Lango, director of business development at Coinbase, who said Binance will most likely be able to “pay full $4.3B DoJ fine with 0 crypto asset sales.”

Lango detailed that after pulling out Binance’s crypto holdings from their Proof of Reserves, he discovered that the exchange still had $6.35 billion in total assets and $3.19 billion in stablecoins.

On Tuesday, Binance, along with its CEO Changpeng Zhao, pleaded guilty to criminal charges related to anti-money laundering and violations of US sanctions.

The plea was made as part of a comprehensive agreement reached with the US Department of Justice, allowing the company to continue its operations.

However, Zhao will step down as CEO, and Binance will be required to pay a substantial $4.3 billion fine.

Under the terms of the settlement, Changpeng Zhao will also personally pay $200 million in fines.

Binance Settlement Could Pave the Way for Spot Bitcoin ETF

According to a research report by broker Bernstein, the settlement with the DOJ could be a significant step toward the approval of a regulated Bitcoin ETF.

Markus Thielen, the head of research at crypto services provider Matrixport, has expressed a similar sentiment, stating that the plea deal between Binance and the DOJ is a favorable outcome for both Binance founder Changpeng “CZ” Zhao and the company itself.

Thielen claimed that Binance will likely remain one of the top three exchanges in the near term.

He also suggested that the industry’s adherence to regulatory rules, as indicated by the settlement, could increase the chances of a spot bitcoin ETF being approved.