The Statistics Of The Research Company Kaiko Show That The Market Share Of The Binance Exchange Has Decreased Due To The Increase Of Regulatory Inspections During The Last Less Than A Year.

According to Kaiko data, the market share of Binance instant transactions on June 19, with a ratio of 56%, did not change much compared to two months ago.

Meanwhile, this percentage was the lowest market share level of this exchange since last August, when it reached 53.7%.

The world’s largest cryptocurrency exchange took a hit after the U.S. Securities and Exchange Commission on June 5 investigated a complaint against Binance and its founder Changpeng Zhao.

Binance’s daily market share fell 47 percent on April 6, following separate complaints from the U.S. Commodity Futures Trading Commission. Pressure on digital currency exchanges such as Binance has also increased due to traditional financial activities such as BlackRock. Attracting investors looking for regulated institutions has led to applications for licenses to begin offering tradable funds on spot bitcoin exchanges.

“Centralized exchanges will find themselves in a tight spot between decentralized exchanges and traditional financial players entering the market,” said Alex Swanwick, CEO of crypto intelligence firm Nansen.

Coinbase, also on the agenda due to complaints from the U.S. Securities and Exchange Commission, saw its market share drop from 7.6 percent in January to 6.8 percent in June. According to data from Kaiko, the American branch of Binance has lost almost all of its market share after the CFTC and SEC complaints. Also, Binance’s share of the Euro pair trades has fallen sharply, according to Kaiko data.

Binance’s market share has also suffered due to discontinuing one of its popular no-fee sales in March. The exchange recently launched a new sale for stablecoins such as True USD, BUSD, USDT from Tether, and USDC from Circle starting June 30.

A Binance spokesperson said the company is determined to maintain its strong financial performance, continue growing its products and services, and invest in processes that comply with the new regulations. The main goal of this company is to provide the best services to users.

Binance is just one of the centralized exchanges affected. In general, the regulatory pressure has led to a decrease in the volume of global transactions in cryptocurrency exchanges and a decrease in investor returns.

Sissy Lu, the founder of blockchain consultancy Venn Link Partners, stated that the regulatory risk is real for all centralized exchanges. He emphasized Binance’s collection of results of regulatory operations and added that Binance has a challenging future ahead of it to gain market share while maintaining compliance requirements.

Regulatory problems

Regulatory pressures and banking problems have forced Binance out of several countries. The company announced on June 16 that it was withdrawing from the Netherlands due to unsuccessful registration. French authorities also investigated it earlier this month after choosing France as its European base. On June 23, Belgian authorities also ordered Binance to cease operations there.

The Australian Securities and Investments Commission revoked Binance’s license to acquire derivatives in April. In addition, local banks and payment partners stopped their services on Binance Australia. Last month, Binance announced that it plans to exit Canada after new cryptocurrency regulations are implemented.

Size advantage

Despite losing some of its market shares during 2023, Binance still seems bigger than other crypto exchanges. This gives Binance founder Zhao an advantage in providing more depth into market volatility and trading.

According to crypto data provider DefiLlama, Binance is also the largest backer of client tokens, with reserves worth $59.2 billion.

Sissy Lu of Venn Link Partners stated: “In the absence of other viable options, investors may still consider Binance as their primary exchange for transactions. The company has proven to provide traders with the highest level of market volatility and depth, which can limit their market share.