The U.S. branch of Binance, a prominent cryptocurrency exchange, has experienced a decline in its market share due to an ongoing conflict with the Securities and Exchange Commission (SEC). Recent data reveals that Coinbase, another leading U.S. crypto exchange, has also been affected by the SEC’s lawsuit.
According to Kaiko, a digital assets market data provider, the market share of Binance US has dwindled to 1.5% of the weekly trading volume on U.S. exchanges. This is a significant drop from its previous standing of 8.2% at the start of 2023. Bloomberg highlights the challenging situation faced by Binance US, with customers withdrawing funds and payment partners severing ties.
The legal woes began when the SEC filed a lawsuit against BAM Trading Services, BAM Management US Holdings, and Binance founder Changpeng Zhao (CZ). The regulators accused them of violating U.S. securities laws, misleading investors, and mishandling user assets.
Fortunately, Binance US managed to avoid an asset freeze by striking a deal with the SEC that necessitates repatriating all U.S. customer funds. However, Clara Medalie, director of research at Kaiko, expresses doubt about the survival of Binance US in a post-SEC world, given the current data.
Coinbase, the largest U.S. crypto exchange, has also witnessed a decline in market share, falling from 56.5% at the beginning of the year to 51% in late June. The SEC has filed a lawsuit against Coinbase as well, accusing the San Francisco-based company of infringing upon securities laws.
Kaiko points out that other crypto exchanges, including Lmax, Bitstamp, and Kraken, have been expanding their market shares in the United States. Kraken, based in the U.S., has experienced growth in its European market share, increasing from 41% at the start of the year to 53% this month. Binance’s global platform has lost over half of its market share in euro-denominated crypto trades in 2023.
Recently, Binance announced its withdrawal from the Dutch market due to its inability to register as a crypto service provider in the Netherlands. Additionally, its Cyprus entity has applied to be removed from the country’s register of digital asset service providers, and the U.K. regulatory authorization of Binance’s British unit has been canceled.
Considering the latest developments, the future prospects of Binance US and other major crypto exchanges in the U.S. and Europe remain uncertain. Feel free to share your thoughts on these developments and the sector’s current state in the comments section below.
Frequently Asked Questions (FAQs) about crypto exchanges
The decline in market share for Binance US and Coinbase can be attributed to the ongoing legal battle with the Securities and Exchange Commission (SEC). Both exchanges have been sued by the SEC, which has accused them of violating securities laws and mishandling user assets.
According to data from digital assets market data provider Kaiko, Binance US market share has dropped to 1.5% of the weekly trading volume on US exchanges. This is a significant decrease from its previous share of 8.2% at the beginning of 2023.
Yes, Coinbase has also witnessed a decline in market share. Its share has decreased from 56.5% at the start of the year to 51% in late June. The SEC has filed a lawsuit against Coinbase, alleging securities law violations.
Kaiko has highlighted other crypto exchanges that have experienced an expansion in their market share. Lmax, Bitstamp, and Kraken are among the exchanges that have seen their market share grow in the United States. Kraken, in particular, has also grown its market share in Europe.
What challenges are Binance US facing apart from the legal battle?
Binance US is facing challenges such as customers withdrawing funds and payment partners cutting off support. These difficulties, coupled with the legal battle with the SEC, have created a difficult situation for the exchange.
What steps has Binance US taken to address the SEC’s concerns?
To address the SEC’s concerns, Binance US has struck a deal that requires repatriating all U.S. customer funds. This has helped the exchange avoid an asset freeze that could have severely impacted its operations.
What does the future hold for Binance US and other major crypto exchanges?
The future prospects for Binance US and other major crypto exchanges in the U.S. and Europe remain uncertain. The outcome of the legal battles and the impact on their market shares will determine their future trajectory.
More about crypto exchanges
- Bloomberg: Binance US Market Share Shrinks Amid SEC Legal Battle
- SEC: U.S. Securities and Exchange Commission
- SEC Lawsuit Against Binance
- Cryptocurrency Market Data