Binance, the largest cryptocurrency exchange, is facing a decline in market share, reaching a one-year low, according to data from research firm Kaiko. The crackdown on the crypto industry, along with legal challenges, has contributed to this decline.
On 5 June, the US Securities and Exchange Commission (SEC) filed a lawsuit against Binance and its founder, Changpeng “CZ” Zhao, which had a negative impact on the exchange’s position.
As of 19 June, Binance’s spot trading market share stood at 56%, unchanged from the previous two months but marking the lowest level since August last year when it dropped to 53.7%.
In April, following a separate complaint from the U.S. Commodity Futures Trading Commission, Binance experienced a significant drop in daily market share, reaching as low as 47%.
The pressure on cryptocurrency exchanges like Binance has increased as traditional financial institutions, such as BlackRock Inc., are seeking approval to offer spot Bitcoin exchange-traded funds (ETFs).
These institutional offerings aim to attract investors looking for regulated platforms. The combination of regulatory scrutiny, legal challenges, and competition from traditional players has contributed to the recent decline in Binance’s market share.