- Binance’s market share approaches a one-year low amid increased regulatory scrutiny.
- SEC lawsuit against Binance and its founder impacts the largest cryptocurrency exchange.
- Withdrawals of Bitcoin and Ethereum from centralized exchanges increase as buying activity surges in the crypto market.
According to data from research firm Kaiko, Binance’s market share has approached a one-year low due to increased regulatory scrutiny on the cryptocurrency industry. On June 5, the U.S. Securities and Exchange Commission (SEC) filed a lawsuit against Binance and its founder, Changpeng “CZ” Zhao, impacting the largest cryptocurrency exchange.
Based on Kaiko’s data, Binance’s spot trading market share remained relatively stable at 56% as of June 19, similar to the preceding two months. This represents the lowest level since it dropped to 53.7% in August of the previous year.
Binance trading affected after SEC lawsuit
Following a separate complaint from the U.S. Commodity Futures Trading Commission on April 6, Binance’s daily market share temporarily fell to as low as 47%. Cryptocurrency exchanges, including Binance, are facing increased pressure as traditional financial players, such as BlackRock Inc., aim to obtain approval for regulated spot Bitcoin exchange-traded funds (ETFs) in order to attract investors.
Notably, over $1.4 billion worth of Bitcoin and Ethereum were withdrawn from centralized exchanges (CEXes) as the crypto market saw increased buying activity in the past week, as indicated by IntoTheBlock data. This suggests that not only Binance, but also U.S.-based Coinbase, which also faced a lawsuit from the SEC, experienced a drop in market share from 7.6% at the beginning of the year to 6.8% in June.
Overall, the regulatory crackdown has dampened investor confidence and led to a decrease in global trading volume across crypto exchanges. Despite a slight decline in market share, the exchange remains larger than all other cryptocurrency exchanges combined. Furthermore, as per data from cryptocurrency data firm DefiLlama, Binance boasts the highest quantity of customer tokens, with reserves estimated at a substantial value of $59.2 billion.
