The once high-volume trading activity of Binance.US has plummeted significantly, with the weekly trade volume dropping from an impressive annual high of nearly $5 billion to a meager $40 million, according to data firm Kaiko. This decline can be attributed to a combination of factors, including regulatory charges filed by the U.S. Securities and Exchange Commission (SEC) and internal challenges faced by the exchange. These obstacles have led to significant changes within Binance.US, impacting its operations and overall market activity.
In June, the SEC filed extensive charges against Binance and its affiliates, accusing them of multiple violations, such as unauthorized access to the U.S. market. This regulatory scrutiny caused the SEC to declare certain cryptocurrencies, including Binance’s BNB and BUSD, as securities. As a result, Binance.US, the U.S. branch of Binance, made the decision to transition into a “crypto-only” exchange after losing its banking partners. This transition, along with the charges, has undoubtedly had a significant impact on Binance.US’s trading volume.
Recent weeks have seen several high-profile departures from Binance.US, including Head of Legal Krishna Juvvadi and Chief Risk Officer Sidney Majalya. Reports suggest that even the CEO of Binance.US, Brian Shroder, has left his position. These departures, combined with the broader regulatory difficulties faced by the exchange, indicate that Binance.US is undergoing major internal changes. Such changes can be disruptive and may contribute to the decline in trading volume.
The SEC’s allegations against Binance also shed light on the exchange’s trading practices. The SEC claimed that extensive wash trading occurred, with Sigma Chain acting as a market maker, leading to an overstatement of trading volume. Additionally, Binance.US relied heavily on Alameda Research, a prominent quantitative trading firm, as the primary counterparty for its over-the-counter trades. These factors suggest potential inaccuracies in Binance.US’s reported trading volumes in the past.
The regulatory oversight and internal management issues faced by Binance.US have significantly affected its market activity. The exchange’s current trajectory represents a drastic departure from its previous high-volume trading. The uncertainty surrounding Binance.US’s future highlights the need for crypto exchanges to prioritize compliance and stability to maintain market confidence.
Binance.US’s trading volume has experienced a substantial decline due to regulatory charges, loss of banking partners, executive departures, and internal changes. The intensified scrutiny of its trading practices further reinforces the challenges faced by the exchange. As the crypto industry faces increasing regulatory scrutiny, exchanges like Binance.US must adapt and ensure compliance to restore market confidence and maintain their operations. The future of Binance.US remains uncertain, but it is evident that significant changes are required to overcome these obstacles and regain its former trading activity.