Binance’s market share drops on CFTC suit and no-fee trading halt: Report
The dominance of cryptocurrency exchange Binance in trading volume market share has slipped over the past two weeks following a lawsuit from the United States commodities regulator and its decision to halt some zero-fee trading.
In an April 4 newsletter blockchain analytics platform Kaiko reported Binance “lost 16% market share of trade volume,” with its market share at 54% as of the end of Q1.
The U.S. Commodity Futures Trading Commission (CFTC) sued Binance on March 27 alleging it flouted regulatory compliance through violations of derivatives laws by offering trading to U.S. customers without registering.
Kaiko said Binance still takes in more volume than the rest of its combined competitors but its March 15 decision to end zero-fee spot and margin trading for 13 trading pairs including BNB (BNB), Bitcoin (BTC) and Ether (ETH) trading pairs with multiple fiat currencies and stablecoins largely contributed to the firm’s downfall.
“Overall, Binance’s excess volume largely vanished with the end of zero-fee trading, which was reflected in an even dispersal in market share among the remaining exchanges,” Kaiko reported.
Kaiko explained part of this fall was alleviated by its U.S. arm, Binance.US, which managed to triple its market share over the quarter from 8% to 24%.
Binance didn’t fall excessively in every domain though, the exchange managed to maintain its derivatives dominance, only giving up 2% market share over the last quarter.
Kaiko explained that the fall in trading volume figures was influenced mostly by the end of zero-fee spot trading as opposed to the CFTC lawsuit:
The market share fall to 54% comes as Binance was one of the “big winners” of the FTX fiasco which saw its market share in trading volume rise to 65%
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