Binance’s regulatory woes and exit from various jurisdictions translated into a decline in the crypto exchange’s market share.
While Changpeng Zhao’s exchange still maintains its position as the world’s largest crypto exchange, its market share has declined dramatically over the past few months.
Market Share Suffers, While Other Exchanges Benefit
According to Bloomberg, Binance’s market share declined from 65.9% in January to 56.4% in May and finally to 55.9% in June 2023.
Data research firm Kaiko says Binance’s market share is almost near the yearly lows. In August 2022, it made a low of 53.7%.
Along with Binance, the second-largest exchange Coinbase’s market share declined from 7.6% to 6.8% due to its regulatory battles.
While Binance and Coinbase lost their market share, some other exchanges benefitted. OKX’s market share grew from 5% in January to 6.8% in June.
Similarly, Kraken’s market share increased from 2.4% to 3.9%, and Huobi’s from 1% to 2.9%.
Lastly, 16 other exchanges’ combined market shares skyrocketed from 9.4% to 16%.
Regulatory Scrutiny
Indeed, regulatory scrutiny may have been a key factor in Binance’s declining market share. Chronologically, the trouble started intensifying when the US Commodities Future Trading Commission (CFTC) filed a lawsuit against Binance for insider trading and breaking trading and derivatives rules.
Then on June 5, the Securities and Exchange Commission (SEC) sued Binance for various violations, including unregistered exchanges, misrepresenting trading controls, and diverting customer assets.
The exchange also faced regulatory challenges in several other countries such as Australia, Canada, Nigeria, Netherlands, and Belgium.
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However, despite the challenges, the exchange still remains the most dominant crypto exchange. According to data from Nansen, Binance has assets worth over $55 billion.
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