The U.S. subsidiary of Binance, Binance.US, has experienced a dramatic decline in its market share — from 27% in April to just over 1% by late June — following heightened regulatory scrutiny and enforcement actions, according to data from Kaiko.
Timeline of Events Leading to the Decline
- April 2023: Binance.US held a 27% market share, its historical peak.
- June 5: The U.S. SEC filed a lawsuit against Binance, Binance.US, and founder Changpeng Zhao, alleging violations of U.S. securities laws.
- June 8: Binance.US announced it would suspend USD trading and encouraged users to withdraw funds.
- Late June: Market share dropped to ~1%, exacerbated by banking access challenges after Signature Bank's collapse.
Key Factors Behind the Drop
- Regulatory Pressure: The SEC's lawsuit created operational uncertainties.
- Banking Disruptions: Loss of USD on/off-ramps after banking partner issues.
- User Exodus: Traders migrated to competitors like Coinbase, which saw its market share rise from 46% to 56% in June.
Industry Reactions
"The SEC’s lawsuit poses an existential threat to all crypto exchanges operating in the U.S. If successful, it could effectively shut down most trading services for American crypto investors."
— Clara Medalie, Research Lead, Kaiko
Contrast with Coinbase
While Coinbase faced its own SEC lawsuit on June 6, it maintained stability, even securing a partnership with BlackRock for a spot Bitcoin ETF. Its stock rose 16% in June and 126% YTD.
FAQs
Q: Can Binance.US recover from this?
A: Recovery depends on resolving regulatory and banking hurdles. Rebuilding trust will be critical.
Q: Where are traders moving their funds?
A: Many shifted to Coinbase, Kraken, and other compliant exchanges with clearer U.S. banking ties.
Q: What does this mean for crypto regulation?
A: The SEC’s actions signal stricter enforcement, potentially reshaping how exchanges operate in the U.S.
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Conclusion
The collapse of Binance.US’s market share underscores the impact of regulatory scrutiny on crypto markets. Exchanges must prioritize compliance to retain user confidence and operational viability. For ongoing coverage, follow trusted financial analysis platforms.