Binance.US, the American arm of the global cryptocurrency exchange Binance, finds itself navigating a treacherous path, beset by a series of unforeseen obstacles that have taken a toll on its trading operations. These challenges have collectively cast a shadow over the once-thriving platform, raising concerns about its long-term viability in the market.
According to data from independent research firm CCData, Binance.US has seen its monthly trading volume plummet by 98% from January to August 2022, with further declines expected in September. The latest figures from Amberdata indicate that the exchange’s trading volume recently plummeted to a mere $5.09 million, starkly contrasting the approximately $230 million recorded on September 17, 2022.
Most of this decline has occurred since March, coinciding with the U.S. Commodity Futures Trading Commission’s allegations against Binance CEO Changpeng Zhao for regulatory violations. In June, the U.S. Securities and Exchange Commission (SEC) initiated legal action against Binance.US, Zhao, and the parent exchange, Binance, alleging various infractions, including the alleged misrepresentation of trading controls and oversight on the Binance.US platform.
This legal battle has thrown Binance.US into turmoil, prompting the SEC to claim that the exchange has struggled to maintain a coherent narrative in a recent filing. In the wake of the lawsuit, Binance.US suspended trading for more than 100 token pairs, resulting in a significant decline in exchange activity and eroding investor confidence.
Internally, the company faced additional challenges, including the departure of its CEO, Brian Shorder, and other key executives, such as Head of Legal Krishna Juvvadi and Chief Risk Officer Sidney Majalya. The SEC has noted that the exodus of Binance.US personnel is accelerating, underscoring the urgent need for a thorough investigation into these issues.
Meanwhile, the SEC encountered a setback when a federal magistrate judge denied immediate access to Binance.US’s software. Since filing charges against Binance.US, Binance Holdings, and Zhao in June, the SEC has faced difficulties obtaining information from the exchange.
On Monday, the SEC sought permission from a federal magistrate judge to examine Binance.US’s technology infrastructure and compel the exchange to provide additional information. While this represents a minor procedural roadblock, it highlights the complexity and contentious nature of the SEC’s crypto-related case.
Data from CoinGecko reveals that as of Monday, Binance.US reported a daily trading volume of approximately $10.5 million. In stark contrast, the largest cryptocurrency exchange in the U.S., Coinbase Global Inc., boasted a daily trading volume of $948 million, underscoring the formidable challenges that Binance.US faces in regaining its footing in the American crypto landscape.