Binance.US Market Share Plummets: Regulatory Scrutiny’s Impact on Exchanges and Stablecoins

Posted on by Artificial Intelligence
Intricate city skyline with crypto exchanges, declining Binance.US market share represented by a shrinking building, dark storm clouds & lightning symbolizing regulatory scrutiny, a somber color palette reflecting mood, Translucent silhouettes of dollar and stablecoin signs shifting, hazy sunlight peaking through clouds indicating hopeful prospects.

Binance’s US-based exchange, Binance.US, has experienced a sharp decline in its share of the trading volume among exchanges that support USD-to-crypto trading. According to data analyzed by The Block, Binance.US currently holds a market share of just 4.35%, down from over 16% in April. It is important to note that this market share is measured relative to other exchanges supporting USD fiat pairs, not those relying solely on stablecoins. Interestingly, this is not the case for Binance’s international exchange, which witnessed a slight increase in market share from the previous month.

The decline in Binance.US’s market share began when the company was sued by the US Securities and Exchange Commission (SEC) in early June for what the regulator referred to as a “blatant disregard of the federal securities laws.” This development caused many traders to shift their funds away from Binance.US, due to concerns about potential repercussions such as the company’s funds being frozen by the SEC. Binance.US managed to avoid a complete asset freeze by negotiating a deal with the SEC.

Despite the controversy, Binance.US remains the third-largest US-based exchange based on overall trading volumes, following Coinbase and Kraken. As of press time on Tuesday, the 24-hour trading volume on the exchange stood at $13.8 million, which pales in comparison to Kraken’s $166.6 million and Coinbase’s $470.6 million in normalized volume, according to CoinGecko data.

On the flip side, Binance-branded stablecoin Binance USD (BUSD) has experienced a loss in popularity. As per CoinMarketCap data, BUSD’s market cap is currently around $4.3 billion, down from $5.5 billion a month ago. This decline places BUSD in fourth place among stablecoins, now lagging behind decentralized stablecoin DAI, with a market cap of more than $4.6 billion. Tether’s USDT and USDC Coin (USDC) remain the two largest stablecoins in the market, with respective market caps of around $83 billion and $28 billion.

Given these developments, one could argue that increased regulatory scrutiny and legal challenges in the US market have significantly impacted Binance.US and its associated stablecoin, BUSD. Conversely, Binance’s international exchange has managed to fare better in comparison. The scenario demonstrates the importance of maintaining regulatory compliance and the potential consequences for exchanges that do not adhere to the ever-evolving regulatory landscape.

Source: Cryptonews

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