Binance US Market Share Shrinks Amid Legal Battle With SEC

Binance US Market Share Shrinks Amid Legal Battle With SEC – Binance’s subsidiary in the United States has experienced a decline in its market share due to the ongoing regulatory crackdown by the Securities and Exchange Commission (SEC). Similarly, Coinbase, a prominent U.S. cryptocurrency exchange also facing a lawsuit from the SEC, is also being adversely affected. 

According to recent data from Kaiko, Binance US now holds a mere 1.5% of the weekly trading volume on U.S. exchanges, indicating the impact of the SEC litigation on the platform. According to the research, the market share of Binance US has decreased from 8.2% at the start of 2023. This substantial decline coincides with a challenging period for Binance’s U.S. subsidiary, as customers are withdrawing funds and payment partners are discontinuing their support. 

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Bloomberg highlighted these developments in a report. The recent challenges arose when the U.S. securities regulator filed a lawsuit against BAM Trading Services, BAM Management US Holdings, and Binance founder Changpeng Zhao (CZ), alleging violations of U.S. securities laws, investor deception, and mismanagement of user assets. Fortunately, Binance US was able to circumvent a devastating asset freeze that could have severely impacted its operations by reaching an agreement with the SEC. 

As per the agreement, Binance is obligated to repatriate all funds belonging to its U.S. customers. However, according to Clara Medalie, director of research at Kaiko, “What we are seeing here is sort of the collapse of Binance US.” She elaborated: “Can Binance US survive in a post-SEC world? I think the jury is still out on that, but looking at the data, I think it’s very unlikely.” In the meantime, Coinbase has also experienced a reduction in its market share, declining from 56.5% at the beginning of the year to 51% in late June. 

Similar to Binance, the Securities and Exchange Commission (SEC) filed a lawsuit against the largest cryptocurrency exchange in the United States. The lawsuit accuses Coinbase, headquartered in San Francisco, of violating securities laws. According to Kaiko, the market shares of several other cryptocurrency exchanges, including Lmax, Bitstamp, and Kraken, are expanding in the United States. 

Kraken, a U.S.-based exchange, has witnessed growth in its market share in Europe, rising from 41% at the beginning of this year to 53% this month. Meanwhile, Binance’s global platform has experienced a significant decline in its market share in euro-denominated crypto trades, losing over half of its market share in 2023.

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Last week, Binance made an announcement that it will be exiting the Dutch market due to its inability to register as a crypto service provider in the Netherlands. Additionally, Binance’s entity in Cyprus has applied for removal from the country’s register of digital asset service providers, and its unit in Britain has canceled its regulatory authorization in the United Kingdom.

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