Binance Spot Trading Volume Drops Nearly 70 Percent
JAKARTA – Shocking news came from Binance, as the world's largest crypto exchange by daily trading volume. This time, however, recent data shows that spot trading volume on Binance plunged nearly 70 percent during the second quarter after the exchange reintroduced fees for its most liquid Bitcoin pairs, data provided by Kaiko shows.
In March, Binance switched trading fee-free from Binance USD (BUSD) to TrueUSD (TUSD) due to regulatory challenges to the BUSD stablecoin. As a result, spot trading volume on Binance fell to the second lowest since 2021, suggesting that users of the exchange left the platform after the incentive was cancelled.
In addition to fee reimbursement, increased regulatory pressure in various jurisdictions such as the United States, Europe, and Nigeria also affected Binance's performance during the second quarter. The US Securities and Exchange Commission (SEC) accused Binance of violating federal securities laws by offering crypto security tokens to Americans.
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This impacted Binance's market share in the United States, with its subsidiary, Binance.US, experiencing a decline in market share to 1 percent due to its liquidity problems.
In Europe, Binance lost its Euro payment partner and had to withdraw from several markets in countries such as Austria, Netherlands, Germany, and Cyprus. In the face of this situation, a spokesperson for Binance stated that the company's focus is currently on ensuring compliance with the Crypto Asset Market (MiCA) regulations that will be enforced in Europe.
During this period, Binance was also forced to issue a termination letter to an entity not affiliated with them, namely “Binance Nigeria Limited,” after being deemed illegal by the Nigerian SEC. Apart from Binance, the decline in spot trading volume also occurred on other exchanges such as Coinbase, Kraken, OKX, and Huobi, which saw declines of more than 50 percent over the same period. As such, it appears that spot trading volume across all exchanges fell to its lowest level since 2020.