Risks around Binance weigh heavily on BNB, which is the fourth biggest crypto currency with $32 billion market value and powers the BNB Chain network
BNB, a crypto currency closely linked to crypto exchange Binance, dropped to its lowest in over a year after a news report regarding fresh risks over Russia sanctions added to already rising regulatory and legal pressure on the firm.
The token dipped to $204 earlier Tuesday afternoon, its weakest level since June 2022’s crypto market crash. It has since cut some of those losses, currently trading at $205, nearly 14 per cent lower over the past week.
This latest drop took place following the Wall Street Journal report that Binance was facilitating Russian users’ ability to move money overseas in spite of widespread international sanctions.
The exchange was already facing regulatory scrutiny around the globe, including a lawsuit from the U.S. SEC for several federal securities laws breaches like commingling customer funds and listing unregistered securities such as BNB and Binance USD on the platform.
Risks around Binance weigh heavily on BNB, which is the fourth biggest crypto currency with $32 billion market value and powers the BNB Chain network, formerly known as Binance Smart Chain.
Further price drops could potentially affect the wider crypto markets, as some market observers have long alleged that Binance might try to raise the token’s value by selling bitcoin. The exchange’s Chief Executive Officer, Changpeng Zhao has previously rejected such rumours.
Besides BNB’s decline this afternoon, bitcoin’s price also dropped to session lows below $25,800.
A looming liquidation of a crypto loan secured by $130 million worth of BNB on Decentralized Finance (DeFi) protocol Venus also adds pressure to the price of the token. BNB Chain is coordinating with Venus to dismantle the loan in an orderly manner to avoid “cascading liquidation” and “unnecessary damage to the market,” as per a Venus governance vote.
The BNB Chain developer team liquidated a $30 million chunk of the outstanding debt on Monday, which somewhat helped ease liquidation risks, according to Coindesk. After the partial liquidation, BNB Chain received $30 million USDT from a Binance wallet, according to blockchain data on Arkham Intelligence.
