Binance’s Co-founder & CEO Changpeng Zhao speaks during the 2022 Web Summit in Lisbon, Portugal, on November 1, 2022.
Ben Mcshane | Sportsfile | Getty Images
Outflows from Binance have amounted to more than $1 billion in the past 24 hours, not including bitcoin, according to data from blockchain analysis firm Nansen, after founder and CEO Changpeng Zhao stepped down and pleaded guilty in a deal with the Department of Justice. Binance agreed to pay $4.3 billion in fines to the U.S. government. The plea deals end a years-long investigation into the crypto exchange.
Meanwhile, liquidity has dropped 25% over the same timeframe as market makers pull back their positions, according to data provider Kaiko.
The outflows are significant and close to what happened previously when the exchange and its founder were charged with 13 securities violations by the SEC.
The exchange’s native token, BNB, is down more than 8% in the last 24 hours. Binance holds around $2.8 billion worth of BNB tokens, according to Nansen. And in March, after Binance phased out zero-fee trading of crypto asset pairs including bitcoin, a key incentive for customers, the exchange began to see its share of all spot trading drop.
Binance remains the world’s largest crypto exchange globally, processing billions of dollars in trading volume every year.
There remains more than $65 billion of assets on the platform, according to Nansen, meaning that Binance is likely capitalized enough to withstand a sudden rush of investors away from the platform. And while withdrawals are on the up, there has not yet been a “mass exodus” of funds from the exchange.
“After the momentary shock of the agreement with the announcement, there is no significant impact on most assets,” said Grzegorz Drozdz, a market analyst at investment firm Conotoxia Ltd.
“The cryptocurrency that seems to have suffered the most, losing more than 9%, is the BNB token from Binance. Of the top 100 cryptocurrencies, as many as 98 have seen a noticeable rebound over the past 24 hours. Bitcoin, meanwhile, fell 4% before rebounding and remaining with a loss of 1.3%,” he added.
Drozdz added that it may be a net positive for the industry now that the dispute with regulators is behind Binance and that the company has pledged to increase security measures.
“This, combined with the likely imminent approval of an ETF based on bitcoin quotes, could positively impact the crypto market in the long term,” said Drozdz.
Can Binance survive at this stage?
That’s the multi-billion dollar question the cryptocurrency giant faces after its CEO and founder Changpeng Zhao agreed to a plea deal and stepped down from the company. Zhao currently faces time in prison in the U.S. for his alleged crimes tied to his role in running the exchange.
Started by the Chinese-born entrepreneur in 2017, Binance went from being a relatively obscure name to being a major force in crypto in a matter of weeks.
Experts CNBC spoke with said that Binance is likely to make it through the ordeal despite a turbulent situation, citing the company’s decision to comply with the DOJ process, implement a three-year strategy to get its operations into compliance, and the amount of assets held within the company’s reserves.
“The sum of $4 billion is clearly very large and will create real pain for Binance’s balance sheet,” Yesha Yadav, Milton R. Underwood professor of law and associate dean at Vanderbilt University, told CNBC via email.
“However, this fine does not appear aimed at dealing a fatal blow to the exchange. Based on Binance’s dominant position within the crypto-ecosystem over a number of years, CZ’s personal wealth … and continuing trading volumes despite declines in overall crypto trading volume as well as in Binance’s market share relative to other venues, I doubt that Binance will face risks to its solvency in paying this fine.”
$4.3 billion plea deal
Zhao and others were charged with violating the Bank Secrecy Act by failing to implement an effective anti-money-laundering program and for willfully violating U.S. economic sanctions “in a deliberate and calculated effort to profit from the U.S. market without implementing controls required by U.S. law,” according to the Justice Department.
Binance has agreed to forfeit $2.5 billion to the government and to pay a fine of $1.8 billion. The total sum of money owed by the company stands at $4.3 billion.
U.S. Attorney General Merrick Garland said in a press conference Tuesday that it’s “one of the largest penalties we have ever obtained.”
“Using new technology to break the law does not make you a disruptor. It makes you a criminal,” Garland said. “Binance prioritized its profits over the safety of the American people.”
Zhao said Tuesday in a post on X, formerly Twitter, that he had “made mistakes” and “must take responsibility.”
Richard Teng, a former Abu Dhabi financial services regulator, was subsequently named as Zhao’s replacement. Teng was most recently the global head of regional markets at Binance.
He was also previously director of corporate finance at the Monetary Authority of Singapore.
The action against Binance and its founder was a joint effort by the Department of Justice, the Commodity Futures Trading Commission and the Treasury Department.
The Securities and Exchange Commission was notably absent.
Treasury Secretary Janet Yellen said in a release Tuesday that the exchange allowed illicit actors to make more than 100,000 transactions that supported activities such as terrorism and illegal narcotics and that it allowed more than 1.5 million virtual currency trades that violated U.S. sanctions.
It also allowed transactions associated with terrorist groups such as Hamas’ Al-Qassam Brigades, Palestinian Islamic Jihad, al-Qaida and ISIS, Yellen said in the release, noting Binance “never filed a single suspicious activity report.”
Zhao has been released on a $175 million personal recognizance bond secured by $15 million in cash and has a sentencing hearing scheduled for Feb. 23.
Binance to continue
Binance will continue to operate but with new ground rules. The company is required to maintain and enhance its compliance program to ensure its business is in line with U.S. anti-money laundering standards. The company is required to appoint an independent compliance monitor.
The case against Binance, which was unsealed Tuesday, shows that three criminal charges were brought against the exchange, including conducting an unlicensed money-transmitting business, violating the International Emergency Economic Powers Act, and conspiracy.
Some of its rivals may look to take advantage of the situation, particularly Coinbase, Kraken, and OKX.Coinbase and Kraken are currently waging their own respective legal battles with the SEC, which hit Coinbase with a lawsuit similar to the one it brought against Binance, alleging it is operating as an unauthorized securities exchange, broker and clearing agency.
And on Monday the SEC sued Kraken, alleging that the exchange commingled $33 billion in customer crypto assets with its own company assets, creating the potential for a significant risk of loss to its users.
Vanderbilt University’s Yadav said Binance’s reserves were likely to come under scrutiny as investors assess where to go after the exit of the company’s CEO. Attempts by Binance to create strategic transparency since the FTX collapse have “floundered,” she added.
Binance published its proof of reserves, a system to show its number of assets and liabilities. But these proofs of reserves are based on limited information that can be divulged from public blockchains, and not on par with a full-scale audit.
“There is no doubt that Binance’s reserves will be coming under scrutiny in the months and years to come,” Yadav explained. “A big question that has hung over Binance is how it is run, the state of its internal governance and risk management.”
“This is a venue that has long been known for its opacity as well as an impenetrable capital and organizational structure whose complexity has caused regulators like the CFTC to investigate these organizational interconnections as possible avenues for Binance to engage in activities violating applicable regulations,” Yadav added.
The position was valued at about $160 million as of Wednesday’s close.
Tripadvisor shares have been flat since the start of the year after plummeting more than 30% in 2024. Last year, the travel review and booking company said it created a special committee to explore potential options.
Read more CNBC tech news
Starboard Value has gained a reputation for pushing for changes such as new CEOs and cost cuts by acquiring significant shares in companies.
People stand in front of an Apple store in Beijing, China, on April 9, 2025.
Tingshu Wang | Reuters
Apple iPhone sales in China rose in the second quarter of the year for the first time in two years, Counterpoint Research said, as the tech giant looks to turnaround its business in one of its most critical markets.
Sales of iPhones in China jumped 8% year-on-year in the three months to the end of June, according to Counterpoint Research. It’s the first time Apple has recorded growth in China since the second quarter of 2023.
Apple’s performance was boosted by promotions in May as Chinese e-commerce firms discounted Apple’s iPhone 16 models, its latest devices, Counterpoint said. The tech giant also increased trade-in prices for some iPhone.
“Apple’s adjustment of iPhone prices in May was well timed and well received, coming a week ahead of the 618 shopping festival,” Ethan Qi, associate director at Counterpoint said in a press release. The 618 shopping festival happens in China every June and e-commerce retailers offer heavy discounts.
Apple’s return to growth in China will be welcomed by investors who have seen the company’s stock fall around 15% this year as it faces a number of headwinds.
Since then, Huawei has aggressively launched devices in China and has even begun dipping its toe back into international markets. The Chinese tech giant has found success eating away at some of Apple’s market share in China.
Huawei’s sales rose 12% year-on-year in the second-quarter, according to Counterpoint. The firm was the biggest player in China by market share in the second quarter, followed by Vivo and then Apple in third place.
“Huawei is still riding high on core user loyalty as they replace their old phones for new Huawei releases,” Counterpoint Senior Analyst Ivan Lam said.
Chinese tech giant Baidu has bolstered its core search platform with artificial intelligence in the biggest overhaul of the product in 10 years.
Analysts told CNBC the move was a bid to keep ahead of fast-moving rivals like DeepSeek, rather than traditional search players.
“There has been some small pressure on the search business but the focus on AI and Ernie Bot is a key move ahead,” Dan Ives, global head of tech research at Wedbush Securities, told CNBC by email. Ernie Bot is Baidu’s AI chatbot.
“Baidu is not waiting around to watch the paint dry, full steam ahead on AI,” he added.
Baidu AI overhaul
Baidu is China’s biggest search engine, but — as is also being seen by Google — the search market is being disrupted.
Users are flocking instead to AI services such as ChatGPT or DeepSeek, which shocked the world this year with its advanced model it claimed was created at a fraction of the cost of rivals.
But Kai Wang, Asia equity market strategist at Morningstar, also noted that short video platforms such as Douyin and Kuaishou are also getting into AI search and piling pressure on Baidu.
To counter this, Baidu made some major changes to its core search product:
Users can now enter more than a thousand characters in the search box, versus 28 previously;
Questions can be asked in a more direct and conversational manner, mirroring how people now use chatbots;
Users can ask questions through voice but also prompt the seach engine with pictures and files;
Baidu has integrated its AI chatbot features, which enable users to generate photos, text and videos, into the product.
“This is more aligned with how people use ChatGPT and DeepSeek in terms of how they look for answers,” Wang said.
Outside of China, Google has also been looking to enhance its core search product with AI, highlighting how search has been under pressure from the burgeoning technology.
Baidu on the offense
Baidu was one of China’s first movers when it came to AI, releasing its first models and ChatGPT-style product Ernie Bot to the public in 2023. Since then, it has aggressively launched updated AI models.
However, the Beijing-headquartered company has also faced intense competition from fellow tech giants like Alibaba and Tencent, as well as upstarts such as DeepSeek.
These companies have also been launching new models and infusing AI into their products and Baidu’s stock has fallen behind as a result. Baidu shares have risen around 2.5% this year, versus a 30.5% surge for Alibaba and a 20% rise for Tencent.
“This is a defensive and offensive move … Baidu needs to be aggressive and perception-wise show they are not the little brother to Tencent on the AI front,” Wedbush Securities’ Ives added.
