As Binance struggles with the ongoing regulatory battles, the troubles keep on increasing for the exchange. According to recent data, Binance’s spot trading volume have been witnessed a continuous significant decline.
Recent data from Kaiko, an on-chain data provider, the spot trading volumes for Binance have reported a continuous decline accounting for nearly 70%. The decline marks the ongoing series in the second quarter after the exchange reintroduced fees for its most liquid Bitcoin pairs.
After being hit by enforcement action from the United States Commodity Futures Trading Commission (CFTC) in March, the exchange abandoned its Binance USD (BUSD) zero-fee trading for TrueUSD (TUSD). The services were stopped primarily due to the allegations involving BUSD stablecoin in the CFTC’s lawsuit.
Following this, the spot trading volumes started to declined and touched its second-lowest month since 2021. This indicates that the exchange users left the platform after the incentives were canceled. However this wasn’t the only reason behind the declining figures.
Beside the fee reintroduction, the increased regulatory pressure across several jurisdictions, including the United States, Brazil, France, and Nigeria, during the second quarter affected Binance’s performance. Notably, during this period, the U.S. Securities and Exchange Commission (SEC) filed charges that the exchange violated federal securities law and offered crypto securities tokens to Americans.
It added the exchange and CEO commingled users’ funds and committee money-laundering practices. Reportedly, in particular the SEC’s yielded spontaneous outputs and resulted in the embattled crypto exchange’s U.S. subsidiary, Binance.US, market share dropping to 1% amid its liquidity issues. In Europe, the exchange lost its Euro payment partner and exited several markets within the region, including Austria, the Netherlands, Germany, and Cryprus.
Amid these exits, a Binance spokesperson said the firm’s focus was ensuring compliance with Europe’s forthcoming Markets in Crypto Assets (MiCA) regulations. Around this period, Binance had to issue a cease and desist letter to an unaffiliated ‘scam’ entity, “Binance Nigeria Limited,” which the Nigerian SEC had declared illegal.
However, Kaiko noted that the decline was not restricted to Binance alone as spot trading activities on other exchanges like Coinbase, Kraken, etc fell by more than 50% during this period. Notably, Coinbase and Kraken are two other exchange that are facing the wrath of the regulator. Nonetheless, it is clear that the spot trading volumes across exchanges have fallen to their lowest levels since 2020.
The services at Binance have taken a backseat amid the ongoing regulatory crackdown. Along with delisting of trading pairs, the exchange halted USD deposits and withdrawals. As the battle between the SEC and Binance intensifes, the regulator also sent a summon to the CEO.
Apart from the lawsuits and affected services, the leaked chats between the executive and the SEC’s motion to freeze assets which was eventually dismissed panicked investor leading to huge outflows. Also, Todayq News reported that amidst all these, due to the increasing selling pressure, Bitcoin was selling at $1,000 lower on Binance than the usual price.