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BNB Token Stumbles to 1-Year Low Amid Mounting Scrutiny Over Binance
Formerly known as Binance Coin, BNB sunk to as low as $204, its weakest level since late June 2022.
Updated Aug 23, 2023, 2:19 p.m. Published Aug 22, 2023, 6:12 p.m.
- BNB dropped to $204 as the WSJ reported that Binance helped Russian users move money abroad.
- Mounting legal and regulatory scrutiny over the exchange and a large distressed BNB-secured loan has weighed on the token’s price.
- Some observers allege that Binance might be selling bitcoin to keep BNB price afloat.
BNB, a cryptocurrency closely linked to crypto exchange Binance, fell to its lowest in more than a year following a news report regarding fresh risks over Russia sanctions added to already mounting regulatory and legal pressure on the company.
The token sank to as low as $204 earlier Tuesday afternoon, its weakest level since June 2022's crypto market crash. It's since pared some of those losses, currently changing hands at $205, down about 14% over the past week.
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This latest decline happened after the Wall Street Journal reported that Binance was facilitating Russian users' ability to move money abroad despite widespread international sanctions.
The exchange was already facing sprawling regulatory scrutiny around the globe, including a lawsuit from the U.S. Securities and Exchange Commission (SEC) for multiple federal securities laws violations such as commingling customer funds and listing unregistered securities like BNB and Binance USD on the platform.
Risks around Binance weigh heavily on BNB, which is the fourth largest cryptocurrency with $32 billion market value and powers the BNB Chain network, formerly known as Binance Smart Chain.
Is Binance selling bitcoin to support BNB price?
Further price declines could potentially impact the broader crypto markets, as some market observers have long alleged that Binance might attempt to prop up the token’s value by selling bitcoin (BTC). The exchange’s CEO, Changpeng “CZ” Zhao has previously denied such rumors.
Alongside BNB's drop this afternoon, the price of bitcoin also declined to session lows below $25,800.
A looming liquidation of a crypto loan secured by $130 million worth of BNB on decentralized finance protocol Venus also adds pressure to the token’s price. BNB Chain is coordinating with Venus to dismantle the loan in an orderly fashion to avoid “cascading liquidation” and “unnecessary damage to the market,” according to 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, CoinDesk reported. Following the partial liquidation, BNB Chain received $30 million USDT from a Binance wallet, blockchain data on Arkham Intelligence shows.
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