Binance US, the American subsidiary of the world’s leading cryptocurrency exchange, has experienced a challenging period with significant customer withdrawals and a decrease in trading volume in recent months. According to market data provider Kaiko, weekly trade volumes on the platform have plummeted to just $40 million, a staggering 99% decrease compared to the almost $5 billion recorded in March during the crypto industry’s revival.
One of the factors contributing to this drastic fall is the lawsuit filed by the US Securities and Exchange Commission (SEC) against Binance, its CEO Changpeng Zhao (CZ), and Binance US. The SEC’s allegations include violations of the law such as self-dealing market manipulation and the sale/offering of multiple unregistered securities, including BNB and BUSD. Additionally, the SEC issued a restraining order to freeze Binance US’s assets, leading to the removal of over 100 trading pairs on the platform.
It’s important to note that Binance and its US arm are not the only crypto organizations facing legal issues with the regulator. Coinbase, another prominent cryptocurrency exchange, has also been sued by the SEC for providing trading services with unregistered securities.
Another reason for the decline in Binance US’s trading volumes could be the overall performance of the cryptocurrency market. While the market was performing well until mid-August, it started plunging afterwards. Bitcoin, for instance, dropped from around $29,000 to below $26,000 in just a few days. Altcoins like ETH, XRP, DOGE, and SHIB also experienced similar volatility. These price declines might have dampened investor enthusiasm, resulting in reduced trading volume on the platform.
Fear, Uncertainty, and Doubt (FUD) surrounding Binance and its American subsidiary may have also contributed to the outflow of investors. The companies have been the subject of unconfirmed news that has undermined their legitimacy and reputation. However, CEO Zhao has been active in addressing these rumors and encouraging followers to ignore media propaganda and misleading information. He believes that the FUD and external pressure have actually united the Binance community, stating, “This, in turn, makes us more determined to drive towards our mission, to increase the freedom of money for people all around the world.”
In conclusion, Binance US has faced significant challenges, including regulatory actions, market volatility, and negative publicity. These factors have led to a sharp decline in trading volumes on the platform. It remains to be seen how Binance US will navigate these obstacles and regain the trust of its customers and the crypto community.
Sources:
– [Kaiko](https://twitter.com/KaikoData/status/1703787456540090845)
– [Cryptopotato – SEC Lawsuit](https://cryptopotato.com/bitcoin-plummets-after-sec-sues-binance-for-securities-violations/)
– [Cryptopotato – Trading Pairs Removed](https://cryptopotato.com/binance-us-delists-101-trading-pairs-following-sec-freezing-order/)
– [Cryptopotato – SEC Lawsuit Against Coinbase](https://cryptopotato.com/us-sec-files-a-lawsuit-against-coinbase-day-after-suing-binance/)
– [Cryptopotato – Market Volatility](https://cryptopotato.com/bitcoin-crashed-to-25-3-but-these-altcoins-have-it-worse-market-watch/)
– [Cryptopotato – FUD and External Pressure](https://cryptopotato.com/fud-and-external-pressure-unites-the-binance-community-cz-claims/)
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About the author - J-S Tremblay
I've been involved in the cryptocurrency world since 2016 and trading since 2019. I started Moon and Lambo in 2021. I'm passionate about crypto and love to share my knowledge. I hate bankers and I hope that cryptocurrency will change the financial world for the better. View full profile...
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