Coinbase Outpaces Binance in Crypto Exchange Race: Report

Coinbase has leapfrogged Binance to become the top-ranked cryptocurrency exchange, according to Kaiko’s Q2 2025 data.

Kaiko, a prominent market data provider, evaluated exchanges on governance, business performance, liquidity, security, technology, and data quality.

Per the results, Coinbase edged out Kraken, Binance, and Crypto.com to claim the number-one spot. The shift underscores investors’ growing emphasis on regulatory compliance and platform trustworthiness.

Kaiko’s report, shared on 5th June, ranked exchanges across six categories. Each category carried equal weight in the overall score.

Governance measured board structure, transparency, and legal compliance. Business performance is considered revenue growth and market share.

Liquidity examined order book depth and bid-ask spreads. Security assessed past breaches, insurance coverage, and auditing.

Technology evaluated system uptime and uptime metrics. Data quality looked at API reliability and historical data accuracy.

Coinbase Beats Binance to Secure Top Spot

Based on the above-mentioned framework, Coinbase secured the highest marks. In governance, it benefits from its status as a regulated U.S. entity.

The exchange must file quarterly reports with the Securities and Exchange Commission (SEC). Binance, by contrast, operates under a more fragmented regulatory regime, with separate entities under distinct jurisdictions.

This difference likely contributed to Binance losing its top ranking in governance metrics. Moreover, Coinbase also led in liquidity.

Although Binance still processes higher daily trading volumes, Kaiko’s model focused on bid-ask spreads and market depth rather than raw volume alone.

In Q2, Coinbase’s ETH/USDT pair averaged a spread of 0.03%, compared to Binance’s 0.05% during peak trading hours. That tighter spread gave Coinbase an edge in liquidity scoring.

Security was another area where Coinbase excelled. Although Coinbase recently disclosed a data breach—an employee at its third-party contractor TaskUs allegedly photographed customer account details—the exchange responded by enhancing its identity verification protocols and offering free credit monitoring to affected users.

Binance, meanwhile, has not reported a major breach in 2025 but still trails in Kaiko’s security index due to past incidents. In 2019, Binance lost 7,000 BTC in a hack, a factor that continues to weigh on its security rating.

Coinbase’s collaboration with law enforcement on high-profile cases has further solidified trust. In April 2024, Coinbase assisted authorities in dismantling a $20 million crypto theft ring led by Chirag Tomar.

Another factor is the recent launch of Coinbase’s spot Bitcoin and Ethereum ETFs. Since SEC approval in early 2025, these products have attracted over $2 billion in combined inflows.

Binance, still awaiting U.S. ETF approval, cannot offer similar products domestically, reducing its appeal to American asset managers.

Tech and Data Quality: Narrowing the Gap

Kaiko’s assessment placed Binance slightly ahead of Coinbase in technology until Q2. Binance’s matching engine processes over 1.4 million orders per second—roughly double Coinbase’s 700,000 orders per second, according to Kaiko.

However, Coinbase narrowed the gap in system uptime, achieving 99.98% uptime compared to Binance’s 99.93% in May 2025. Reliable uptime reduces failed orders during peak volatility, a crucial factor for professional traders.

Data quality was a third area where Coinbase made gains. Its API latency averaged 15 milliseconds, compared to Binance’s 22 milliseconds during Q2.

Faster, more reliable data feeds help algorithmic traders execute strategies with minimal slippage. Binance continues to lead in the number of trading pairs—over 600 compared to Coinbase’s 150—but Kaiko’s model weighs data reliability over breadth alone.

Ongoing Legal and Security Challenges

Despite its top ranking, Coinbase is not without challenges. The January 2025 data breach prompted a class-action lawsuit filed in March 2025 by the Oregon Attorney General’s office, alleging negligent data security practices.

Coinbase plans to contest the suit in federal court, citing improvements in its vendor management and encryption protocols.

Binance, on the other hand, faces regulatory pressure in multiple jurisdictions. In June 2025, the U.K.’s Financial Conduct Authority (FCA) opened an investigation into Binance’s compliance with anti-money laundering rules.

If the FCA issues penalties, Binance’s governance score will likely decline further, affecting future rankings.