Binance US Market Share Plummets Amid SEC Legal Battle
In a blow to Binance US, the world's largest cryptocurrency exchange's market share has plummeted amid the ongoing legal battle with securities regulator, SEC. Leading US crypto exchange Coinbase is also facing a similar ordeal after being sued by the Securities and Exchange Commission (SEC).
Binance US Market Share Drops to 1.5% of Trading Volume
Binance US, the world's largest cryptocurrency exchange's market share has plummeted to a mere 1.5% of the weekly trading volume on exchanges in the United States, according to data from digital assets market data provider Kaiko.
This significant decline, down from 8.2% at the start of 2023, comes amidst a tumultuous period for Binance's subsidiary in the US. Customers are withdrawing funds, and payment partners are cutting off support, as reported by Bloomberg.
The troubles for Binance US began with a lawsuit filed by the US Securities and Exchange Commission (SEC) against BAM Trading Services, BAM Management US Holdings, and Binance founder Changpeng Zhao (CZ). The lawsuit alleges violations of US securities laws, misleading investors, and mishandling of user assets.
Despite avoiding an asset freeze through an agreement with the SEC that mandates the repatriation of all US customer funds, Binance US now faces an uncertain future. However, according to Clara Medalie, director of research at Kaiko, “What we are seeing here is sort of the collapse of Binance US.” Expressing skepticism she said:
"Can Binance US survive in a post-SEC world? I think the jury is still out on that, but looking at the data, I think it’s very unlikely."
Coinbase, the leading US cryptocurrency exchange, is also feeling the impact, with its market share shrinking from 56.5% to 51% in late June. The SEC filed a lawsuit against the largest US crypto exchange as well, alleging that the San Francisco-based company was also involved in breaching securities laws.
Market Share of Other Crypto Exchanges Expands in the US
Conversely, the Kaiko report has revealed that other crypto exchanges like Lmax, Bitstamp, and Kraken are expanding their market shares in the United States. In Europe, US-based Kraken has witnessed substantial growth, increasing its market share from 41% to 53% this month. Additionally, Binance's global platform experienced a staggering 50% decline in its market share for euro-denominated crypto trades in 2023.
Notably, Binance recently announced its departure from the Dutch market due to an inability to register as a crypto service provider in the Netherlands. Furthermore, its entity in Cyprus sought removal from the country's register of digital asset service providers, and Binance's UK unit cancelled its regulatory authorization in the UK.
What future do you expect for Binance US and other major crypto exchanges in the US and Europe? Please share your thoughts on the latest developments in the sector in the comments section below.
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