Bitcoin-BTC Trading Volume on Binance Halves Due to SEC and DOJ Audit; Advantages of Coinbase (COIN).
Bitcoin (BTC) trading volume on Binance has plummeted this month as the world’s largest crypto exchange faces mounting lawsuits and regulatory scrutiny.
According to K33 Research, Binance’s 7-day average spot BTC volume has fallen 57% since the beginning of September, while levels on a number of other exchanges remained almost unchanged. US competitor Coinbase’s volumes rose 9% in the period.
The dramatic decline comes as Binance finds itself in the crosshairs of regulators around the world after a series of lawsuits, license denials and voluntary withdrawals. U.S. Department of Justice (DOJ) prosecutors are reportedly weighing charges against the company, while the Securities and Exchange Commission (SEC) three months ago ordered Binance, the exchange’s U.S. unit Binance.US, and founder Changpeng “CZ” Zhao is sued on multiple counts under federal securities laws.
“The ongoing DOJ and SEC proceedings against Binance may have discouraged market makers from trading on Binance, which explains some of the decline,” said Vetle Lunde, senior analyst at K33 Research. “Some of the market making has likely leaked to other exchanges, but it is still almost certain that Binance’s issues are having a negative impact on market volume,” he added.
Binance.US also suffered from an exodus of trading activity. Data from crypto analytics firm Kaiko shows that total weekly trading volume on this platform has fallen to $40 million from nearly $5 billion at the start of the year, a decline of about 99%.
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