Analysts at Matrixport do not rule out there will be pressure to ‘right-size’ Binance.
With Changpeng Zhao leaving Binance as its Chief Executive Officer (CEO), the crypto exchange will likely have from two to three years before competition in the market starts affecting the company’s position, according to a new report.
Analysts at Matrixport, a Singapore based crypto management platform founded by Jihan Wu, wrote that there “will likely be pressure to ‘right-size’ the company.” As of July 2023, Binance had almost 8,000 employees and even planned to hire more, while other crypto exchanges reduced their headcounts in a bid to optimize operating expenses.
“With Changpeng Zhao stepping down and the fine less than the $10 billion feared, Binance will likely remain a top-three exchange over the next two-three years.”
Analysts also suggest that more exchanges will eventually “enhance their compliance programs and become part of a surveillance-sharing agreement,” as the U.S. market is anticipating the launch of a spot Bitcoin (BTC) exchange-traded fund (ETF).
“With this plea deal, the expectations for a spot Bitcoin ETF might have increased to 100% as the industry will be forced to follow the rules that TradFi firms must follow.”
Although Binance is in danger of losing ground due to the management restructuring, the report indicated that industry “whitewashing” will make the case for Bitcoin adoption case at the institutional level more likely, potentially breaking ground for crypto to “become a safe-haven asset in investors’ portfolios,” the Matrixport concluded.
As crypto.news reported, Changpeng Zhao’s decision to step down as CEO of Binance and plead guilty to violating U.S. anti-money-laundering requirements has sparked a complex web of events involving U.S. regulatory bodies, particularly in the context of the settlement agreement.
Under the reported settlement, Zhao will step down from his role, and Binance, the company he founded in 2017, will plead guilty to charges of anti-money laundering and sanctions violations. Additionally, Binance has agreed to pay fines totaling $4.3 billion, which includes resolving civil allegations brought by regulators. Zhao himself has also agreed to pay a $50 million criminal fine, with the possibility of a reduction based on his agreement to pay separate civil penalties.