An Unusual Situation in Binance Data – Not Seen in Years

Binance, the world’s largest cryptocurrency exchange, has seen its market share drop to its lowest level in four years, according to a new report from CCData.

Binance Data Shows Low Performance Not Seen Since 2020

The report reveals that Binance currently accounts for only 36.6% of the total spot and derivatives trading volume on centralized crypto exchanges, marking its weakest performance since September 2020.

Binance’s spot trading volume in September fell by nearly 23% compared to August, taking its market share to 27%, the lowest level since January 2021. Derivatives trading also fell by 21%, taking its market share to 40.7%, a level not seen since 2020. These declines come as Binance faces increased competition and growing regulatory challenges.

One of the biggest beneficiaries of Binance’s decline was Crypto.com, where spot and derivatives trading volumes increased by over 40% month-on-month. According to CCData, Crypto.com saw the biggest gain in spot trading year-to-date, increasing its market share to 10.5%.

Overall, trading activity on crypto exchanges fell last month, with both derivatives and spot trading volumes down 17%. Analysts at CCData attribute the decline to the typical mid-year trading slowdown but expect a recovery in the coming months. “With increased market liquidity following the Fed’s rate cut and catalysts such as the upcoming US elections, trading activity on centralized exchanges is expected to increase,” the report said.

The company’s weakening market dominance coincides with increasing regulatory pressure. In September, the U.S. Securities and Exchange Commission (SEC) filed an amended complaint against Binance targeting its token listing practices.

This lawsuit follows a June 2023 lawsuit in which the SEC accused Binance of operating as an unregistered broker, clearinghouse, and trading platform, as well as offering unregistered securities.

To resolve these charges, Binance agreed to pay $4.3 billion in fines to various U.S. regulators. Additionally, Binance founder and former CEO Changpeng “CZ” Zhao was recently found guilty of violating the Bank Secrecy Act (BSA) for failing to implement proper know-your-customer (KYC) systems. Zhao was sentenced to four months in prison and released last week.

*This is not investment advice.