Cryptocurrency exchange Binance and its U.S. affiliate have experienced a decline in their market share this year due to increased regulatory pressures. The market share of Binance globally dropped from 60% at the beginning of the year to 52% after the U.S. Securities and Exchange Commission (SEC) filed a lawsuit against the exchange for alleged rule violations.
The decline in Binance’s market share started in March when the exchange ended zero-fees transactions for certain trading pairs. According to Dessislava Aubert, an analyst at Kaiko, other exchanges such as Bybit and OKX have benefited the most from Binance’s loss in market share.
Binance’s U.S. partner, Binance.US, also faced challenges as its market share plummeted from over 22% in April to a mere 0.9% on June 26. This decline came after the exchange imposed a June 13 deadline for customers to withdraw their dollar funds following the SEC’s request to freeze Binance’s assets.
In contrast, Coinbase experienced a boost in its U.S. market share in June, rising to 55% from 48.4%. This increase was attributed to Coinbase’s inclusion as a surveillance partner by Fidelity and other asset managers in their filing for a spot bitcoin exchange-traded fund (ETF).
Crypto companies have been engaged in ongoing disputes with regulatory authorities over the classification of crypto tokens as securities. They have consistently urged the SEC to establish clear rules in this regard.
While bitcoin saw a rally towards the end of the second quarter, reaching a one-year peak of $31,458, overall spot trade volumes declined to their lowest level since 2020. However, sentiment improved as major asset managers like BlackRock put forth proposals related to cryptocurrencies, boosting market sentiment.
