Following the lawsuit from the United States Securities and Exchange Commission (SEC), troubles have been on a consistent rise for Binance, world’s largest crypto exchange. Recently, Binance US, which is the America based subsidiary of the exchange, has seen a sharp decline in its share of the trading volume among exchanges that support USD-to-crypto trading.
According to recent data, the market share held by Binance US has dwindled in the recent times. Analysts suggest that the exchange now holds a market share of just 4.35%, down from more than 16% in April. Reportedly, the market share is measured relative to other exchanges that support trading in USD fiat pairs, and not those who rely only on stablecoins.
However, the case is not the same for Binance’s international exchange, which saw its market share increase slightly from the prior month. Notably, the market shares of Binance US started falling when the company was sued by the US Securities and Exchange Commission (SEC) in early June for what the regulator called “blatant disregard of the federal securities laws.”
On June 5th, the SEC filed 13 charges against Binance’s US subsidiary for unregistered offers and sales of the stablecoins – BNB and BUSD, its services namely the Simple Earn and BNB vault products, and its staking program. Following this, the SEC filed an emergency motion to freeeze the assets of Binance US prevent dissipation or transfer of those assets from the jurisdiction of this court, and protect this court’s ability to award relief in the form of disgorgement, prejudgment interest, and civil penalties.”
Since then, many traders have moved funds off Binance.US, fearing what might happen if for instance the company’s funds were to be frozen by the SEC. However, Binance US has managed to a avoid a total asset freeze through a deal with the SEC. During the weekend, Binance US and the SEC made a an agreement to repatriate the customers’ assets to the US, which helped them avoid the total freeze.
While the motion didn’t pass through and the restraining order wasn’t implemented, Binance US delisted several trading pairs from the platform. It also suspended all USD deposits and withdrawals, and the exchange will serve as a crypto only exchange.
Based on the latest overall trading volumes among exchanges that operate in the US, Binance.US still remains the third largest exchange in the country after Coinbase and Kraken. According to data from CoinGecko, as of Tuesday, the 24-hour trading volume on the exchange stood at $13.8 million, well behind Kraken’s $166.6 million and Coinbase’s $470.6 million in normalized volume.
Additionally, Binance has also reported very significant levels of exchange outflows in the past week. As reported by Todayq News, Binance outflow levels have been significantly higher than Coinbase suggesting waning trust of investors on the centralised exchanges amid the turbulence of regulatory crackdown.
While both the crypto giants received enforcement actions from the SEC, the effects on Binance have significantly higher. This is also due to the wide range of allegations on the exchange including the commingling of funds by the CEO Changpeng Zhao (CZ).
Simultaneously, the case of the SEC with Binance US is also looking out to be strong considering the listed evidences which also include the leaked chats between the firm’s executives mocking compliance standards of the exchange. Additionally, the exchange has received another lawsuit from the Commodity Futures Trading Commission (CFTC) alongside the investigation from the DoJ over the charges of money-laundering.