Binance’s Market Share Falls As A Result Of Regulatory Pressure And Fee Changes

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Binance’s stake in the global cryptocurrency spot market has allegedly declined.

Binance’s share of spot trading has dropped by 17 percentage points since the beginning of the year, from 90% to 73%, Bloomberg reported Tuesday (July 18), citing statistics from cryptocurrency market data source Kaiko.

At the same time, other offshore platforms, according to the research, are taking advantage of Binance’s marketplace vulnerabilities. According to the report, OKX’s market share nearly doubled from January to 11%, while Huobi and Bybit grew to 9% and 7%, respectively, of worldwide spot crypto trading volume over the same period.

According to the research, Binance’s market share fall was caused in part by the new and more strict regulatory environment in the United States, including litigation launched against the business by the Commodity Futures Trading Commission (CFTC) and the Securities and Exchange Commission (SEC).

On June 5, the SEC filed 13 accusations against Binance and its founder, Changpeng Zhao, claiming various securities law breaches. The SEC accusations include acting as unregistered exchanges, brokers, dealers, and clearing agencies; making unregistered offers and sales of crypto assets; failing to limit access to Binance.com for US investors; and deceiving investors.

Binance replied with a blog post in which it stated that it is “disappointed” with the SEC’s decision since Binance has cooperated with the regulator’s investigations, attempted to resolve its concerns, and sought a negotiated settlement.

On Sunday (July 16), it was reported that Binance has reduced employment and faced with a wave of management departures in response to rising regulatory pressure.

Binance’s market share was also harmed by the termination of its zero-fee trading programs, according to Clara Medalie, director of research at Kaiko.

According to Seeking Alpha, after Binance discontinued most zero-fee trading in March, trade volume on the platform fell to its lowest level during the weekend since July 2022.