SEC lawsuits on crypto exchange Binance and founder Changpeng Zhao has dented the company’s business operations with trading volumes taking a hit.
The world’s largest cryptocurrency exchange by trading volume – Binance – saw a drop in its market share this month in June following the regulatory action by the US Securities and Exchange Commission (SEC) on the exchange and its chief Changpeng Zhao.
The lawsuit has particularly affected the US affiliate of the crypto exchange i.e. Binance.US. Blockchain data and research firm Kaiko reported that Binance’s share in the spot trading market dropped to 53.7%, from the 56% share at the beginning of the month.
Binance’s market share has remained quite volatile this year as it faces major regulatory action. After the lawsuit by the US Commodity Futures Trading Commission earlier this year, Binance’s daily market share plunged to as low as 47% as on April 6.
Also, Binance’s market share took a dive after the crypto exchange halted its zero-fee promotion earlier this year in March 2023. Speaking on the development, a Binance spokesperson said:
“The company will continue to maintain our strong financial performance. Our primary objective is to deliver for our users by maturing our products and services and continuing to invest in compliance processes for a new era of regulatory certainty.”
Binance Faces Market Competition
Big players from the traditional financial market have started stepping into the crypto space seeing more opportunities and the growing adoption of the asset class. These players offer investors a regulated environment for seeking exposure to cryptocurrencies.
Thus, they are likely to pose greater competition to giants like Coinbase and Binance, who are facing the regulatory heat. “Centralized exchanges will find themselves in a squeeze between decentralized exchanges and traditional-finance players entering the market,” said Alex Svanevik, chief executive officer of crypto intelligence firm Nansen.
But Binance is not the only player facing the regulatory heat. This month in June, US-based crypto exchange Coinbase saw its market share decline from 7.6% in January to 6.8% in June.
Due to increasing regulatory and banking challenges, Binance, a cryptocurrency exchange, has made the decision to withdraw from multiple countries. On June 16, the company announced its exit from the Netherlands due to a failed registration attempt. It also faced an investigation by French authorities after choosing the country as its European base. Additionally, on June 23, Belgian authorities ordered Binance to halt its operations in the country.