Bitcoin (BTC) prices are falling as Binance faces a $4 billion settlement

Binance’s settlement with the US Securities and Exchange Commission (SEC) over multiple allegations triggered a market decline, with the impact felt most by futures traders betting on further growth.

Data from CoinGlass shows that exchanges liquidated $227 million worth of crypto perpetual futures positions in the last 24 hours. Bullish long positions accounted for almost 80% of the balance. Meanwhile, over $67 million worth of Bitcoin long and short positions were liquidated in the last 24 hours, relating to bets on and against price increases, respectively. This was one of the highest liquidation events in 2023.

Ether (ETH) futures traders suffered $27 million in losses, while Solana SOL traders suffered $10 million. BNB recorded comparatively lower liquidations of $6 million. BNB is the token of the BNB ecosystem created by Binance, and traders usually peg the token to the exchange’s assets.

Traders on crypto exchange Binance suffered $100 million in liquidations, the most among counterparties, with OKX pocketing $62 million.

Liquidation is the case where an exchange forcibly closes a trader’s leveraged position due to a partial or complete loss of the trader’s original margin. This happens when a trader is unable to meet the margin requirements for a leveraged position (does not have sufficient funds to keep the trade open).

Large liquidations can signal the local high or low of a steep price move, potentially allowing traders to position accordingly.

Such data is beneficial for traders because it serves as a signal that leverage is effectively being washed out of popular futures products – and serves as a short-term indication of a decline in price volatility.

Binance, the world’s largest crypto exchange, was criminally charged with violating sanctions and money transfer laws and agreed to pay $4.3 billion to settle the charges. This is “one of the largest penalties” the U.S. has ever imposed on a corporate defendant.

Founder Changpeng “CZ” Zhao pleaded guilty in Seattle to the charges he personally faced and agreed to pay a $50 million fine and step down from the CEO position. Richard Teng, a former Abu Dhabi regulator and later head of Binance’s regional markets, will take over as CEO.