In the midst of increasing regulatory scrutiny and legal battles, Binance witnessed a substantial 57% decrease in its weekly Bitcoin trading volume since the beginning of the month. This decline suggests potential instability for the world’s largest cryptocurrency exchange.
This downtrend aligns with growing legal challenges and heightened regulatory supervision directed at the exchange on a global scale.
Binance’s Regulatory Struggles Persist:
The exchange has been grappling with a series of legal and regulatory setbacks, including lawsuits, license denials, and voluntary market withdrawals. Reports indicate that the U.S. Department of Justice is contemplating filing charges against Binance. Furthermore, the U.S. Securities and Exchange Commission initiated legal action against Binance, its American subsidiary Binance.US, and its founder Changpeng Zhao (commonly known as CZ) three months ago, alleging violations of multiple federal securities laws.
September proved to be a challenging month for the exchange. In the face of regulatory pressure, several high-profile executives resigned from the company. Nonetheless, Zhao asserted that these departures were merely employees moving on to new roles and opportunities, denying any significant challenges for the firm.
On September 7th, Binance implemented a noteworthy policy change by discontinuing its zero-fee promotion for Bitcoin trading against the TrueUSD (TUSD) stablecoin. This trading pair had been one of the most actively traded on the platform, and the policy shift may have contributed to the observed decline in trading volume.
The pressure isn’t limited to the global platform alone. Binance’s U.S. subsidiary, Binance.US, has also experienced a dramatic reduction in trading activity. According to data from crypto analytics firm Kaiko, the weekly aggregate trading volume on Binance.US plummeted to $40 million, a stark contrast to the nearly $5 billion recorded earlier this year. This represents an approximate 99% drop in trading volume.
