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Binance Market Share Declines Amid Regulatory Challenges, US Affiliate Also Impacted

Binance, the leading global cryptocurrency exchange, and its US counterpart, Binance.US, have encountered significant hurdles throughout the year. Intensified regulatory scrutiny in various jurisdictions has resulted in a notable decline in market shares.

A pivotal setback for Binance was the lawsuit filed by the Securities and Exchange Commission (SEC), alleging regulatory irregularities. Data from analytics firm Kaiko reveals that this legal action caused Binance’s global market share to drop from 60% at the beginning of the year to 52% as of last month.

Dessislava Aubert, an analyst at Kaiko, suggests that Binance’s decision to discontinue zero-fee transactions for certain trading pairs in March may have contributed to the decline in market share. As Binance’s share price suffered, rival exchanges such as Bybit and OKX capitalized on the situation.

Aubert explains that Binance’s market share has spread across various exchanges, with Bybit and OKX performing particularly well. Binance.US, positioned as an independent partner of Binance, has also faced market volatility.

The SEC’s pursuit of a court-ordered asset freeze significantly impacted Binance.US’s market share. The exchange’s stake in the US market plummeted from over 22% in April to 0.9% by June 26.

In contrast, Coinbase, another major player in the industry, experienced increased activity. Coinbase’s market share in the United States rose to 55% in June, up from 48.4%.

Aubert attributes this rise to Fidelity and other asset managers selecting Coinbase as a surveillance partner to file a spot Bitcoin ETF.

It is worth noting that various crypto businesses are challenging the SEC’s assertion that crypto tokens should be classified as securities and are advocating for clear standards. Binance’s challenges are not unique, as the entire cryptocurrency market faced difficulties in the second quarter, with spot trade volumes reaching their lowest point since 2020.

Despite these market challenges, Bitcoin surged towards the end of the quarter, reaching a one-year high of over $31,000. This surge was influenced by positive suggestions from prominent asset managers, notably BlackRock, which enhanced overall market optimism.

Returning to Binance, the Australian Securities and Investments Commission (ASIC) recently conducted an investigation at the exchange’s offices regarding its defunct local derivatives operations. This adds to Binance’s mounting pressure as it navigates regulatory hurdles worldwide.

Amidst the negative headlines surrounding Binance, its native coin, BNB, has responded with volatility. Over the past week, BNB has gained 3.4% but experienced a 0.9% loss in the last 24 hours. BNB is currently trading at $239.70, with a trading volume of $676.8 million.


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