Binance’s Market Share Drops amid Regulatory Pressure

<p>The market share of the top cryptocurrency exchange
Binance, and its US affiliate, Binance.US, has declined, the latest market data shows.
The decline is anticipated to be due to the recent lawsuit filed against the exchange by the
Securities and Exchange Commission (SEC).</p><p>The market share of
Binance.US had dropped the most. According to the cryptocurrency data provider,
Kaiko, as quoted by Reuters, the market share of the purportedly independent
<a href="https://www.financemagnates.com/terms/e/exchange/">exchange</a> dropped from 22% to 0.9% between April and June. </p><p>Regulatory Troubles</p><p>Binance.US was dealt a
blow when the SEC <a href="https://www.financemagnates.com/cryptocurrency/sec-seeks-court-order-to-freeze-binanceus-assets/" target="_blank" rel="follow">sought
court orders</a> to freeze
the assets of the exchange. The regulator told the court in June that a
temporary freeze of the exchange’s assets would protect investors from losing
their funds. However, the two parties later <a href="https://www.financemagnates.com/cryptocurrency/court-approves-deal-between-sec-and-binanceus-to-avoid-asset-freeze/" target="_blank" rel="follow">agreed
to a deal</a> that
prevented the need to freeze the assets.</p><p>Besides that, Binance.US
was forced to suspend US dollar deposits in June, citing what it termed as
‘aggressive and intimidating’ tactics by the SEC. Additionally, the company
said it was planning to halt US dollar withdrawals after its banking
partners withdrew their support.</p><p>Binance, the global
exchange platform, has similarly witnessed a reduction in market share from 60%
at the beginning of the year to 52%. The reduction is tied to the step the exchange took in March to end zero-fee trading for most of the BTC pairs. The zero-fee
trading pairs accounted for 60% of all the trading volumes on the platform before
most of the pairs were suspended.</p><p>Binance’s Declining Spot
Trading Volumes</p><p>What is also believed to have caused the decline in
market share is the drop in the spot trading volumes, which was at the lowest in the second quarter since 2020, the data revealed.
The decline is despite the surge in the price of Bitcoin after major asset
managers, including BlackRock, sought approval for the spot <a href="https://www.financemagnates.com/terms/b/bitcoin/">Bitcoin</a>
exchange-traded funds.</p><p>Meanwhile, <a href="https://www.financemagnates.com/" target="_blank" rel="follow">FinanceMagnates</a> reported that Binance was <a href="https://www.financemagnates.com/cryptocurrency/germany-joins-anti-binance-sentiment-bafin-rejects-license-application/" target="_blank" rel="follow">facing
resentment in Germany</a> a week ago, citing the financial news website, Finance
Forward. The
exchange’s application for a crypto custody license in the country had not been
approved.</p><p>On top of that,
the Australian Securities and Investments Commission (ASIC) recently searched Binance’s
offices concerning the now-closed derivatives business operated by the exchange's Australian affiliate. Binance
terminated the service earlier after the regulator cancelled its license.</p>

This article was written by Jared Kirui at www.financemagnates.com.