Crypto exchange giant Binance is facing a significant decline in market share, falling to its lowest level in four years, according to a report released on Thursday by CCData.
Binance’s Performance Hits Lowest Levels Since 2020
The report revealed that Binance now handles only 36.6% of overall spot and derivatives trading volume on centralized crypto exchanges – its weakest performance since September 2020. This represents a substantial drop from August, with spot trading falling by nearly 23% and derivatives trading declining by 21%. Both figures translate to the exchange’s lowest market share since early 2021.
Binance has not yet responded to requests for comment.
The report points to Crypto.com as a major beneficiary of Binance’s decline. Crypto.com experienced a surge in spot and derivatives trading volume, increasing by over 40% month-on-month. Year-to-date, they have emerged as the leader in spot trading growth, capturing 10.5% of the market share.
Overall, trading activity on crypto exchanges dipped last month, with both derivatives and spot volumes decreasing by 17%. However, CCData analysts believe this is a seasonal trend, and a busier final quarter is expected. They anticipate a rise in trading activity in the coming months due to potential catalysts like increased market liquidity following the Federal Reserve’s interest rate cut and the upcoming U.S. election.
Binance’s diminishing dominance coincides with a period of heightened regulatory pressure on the exchange. The U.S. Securities and Exchange Commission (SEC) recently filed a proposed amended complaint scrutinizing their token listing practices. This follows a June 2023 lawsuit accusing Binance of operating as an unregistered entity and offering unregistered securities. The exchange settled charges with various U.S. regulators by paying a $4.3 billion fine.
Furthermore, Binance’s founder, Changpeng “CZ” Zhao, faced legal repercussions. He pleaded guilty and served a four-month sentence for violating the Bank Secrecy Act by failing to implement adequate know-your-customer (KYC) systems at the exchange. He was released last week.
