Binance.US, the American affiliate of the world’s largest crypto exchange, is quickly losing market share in the advent of a Securities and Exchange Commission lawsuit alleging fraud and the illegal sale of unregistered securities.
(Bloomberg) — Binance.US, the American affiliate of the world’s largest crypto exchange, is quickly losing market share in the advent of a Securities and Exchange Commission lawsuit alleging fraud and the illegal sale of unregistered securities.
Binance.US now accounts for only 1.5% of the total weekly trading volume among US crypto exchanges, down from 8.2% at the beginning of the year and its peak of 22% in late March, according to data from Kaiko.
The sharp decline comes as Binance.US battles a number of challenges: its banking and payments partners are cutting off support, its liquidity is drying up and customers have been withdrawing funds from the platform.
“So what we are seeing here is sort of the collapse of Binance.US,” said Clara Medalie, director of research at Kaiko, in an analyst call Tuesday. “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.”
While it reached an agreement with the SEC to avoid a total asset freeze, Binance.US is preparing for a “multi-year and very costly litigation process,” which resulted in an unspecified number of job cuts last week.
Coinbase Global Inc., the biggest US crypto exchange which was also sued by the SEC, saw a smaller hit to its market share, which has fallen to 51% in late June from 56.5% at the beginning of the year, according to Kaiko. Exchanges including LMAX, Bitstamp and Kraken are gaining shares in the US, Kaiko said.
Both Binance.US and Coinbase have denied allegations by the SEC.
Binance, the global platform, also lost more than half of its market share in crypto trades denominated in euros this year. Last week, Binance said it’s leaving the Netherlands after failing to register with the country’s financial authorities. Meanwhile, it had an on-site visit by French authorities, which have been investigating the firm for alleged illegal provision of digital-asset services and acts of aggravated money laundering. A Binance spokesperson declined to comment on specifics of law enforcement or regulatory investigations.
Kraken has grown its market share in euro-based trades to 53% in June from 41% at the start of the year.
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