It is safe to say that Binance US – the American subsidiary of the world’s leading cryptocurrency exchange – has passed through turbulent times, witnessing considerable customer withdrawals and diminished trading volume in the past several months.
According to the market data provider Kaiko, weekly trade volumes on the platform have recently plunged to a mere $40 million (a 99% decrease compared to the nearly $5 billion registered in March when the crypto industry showed signs of revival). In the following lines, we will observe what factors led to this immense fall.
The SEC Lawsuit
While the weekly trade volume started dropping at the beginning of May, its temps significantly intensified once the US Securities and Exchange Commission (SEC) filed a lawsuit against Binance, its CEO Changpeng Zhao (CZ), and the American subsidiary Binance US.
The regulator’s allegations included law violations such as self-dealing market manipulation and the sale/offer of multiple unregistered securities, such as BNB and BUSD.
In addition, the SEC launched a restraining order against Binance US to freeze its assets. Shortly after that attack, the marketplace removed over 100 trading pairs, including BCH/BTC, BCH/USDT, DOT/BTC, XTZ/BTC, AAVE/USDT, COMP/USDT, EOS/USDT, and many more.
It is worth mentioning that Binance and its US arm are not the only crypto organizations at war with the watchdog. The latter has also sued Coinbase, accusing it of providing trading services with unregistered securities such as ADA, SOL, MATIC, and others.
The Market Failed to Keep the Momentum
Another reason leading to the disappointing weekly trade volumes for Binance US could be the overall cryptocurrency market, which was performing quite well until mid-August but started plunging after that.
Bitcoin, for one, was trading at around $29,000 on August 16, whereas its price crashed below $26,000 in the following days. Altcoins, such as ETH, XRP, DOGE, SHIB, and many others, have also witnessed similar volatility.
Such price declines might have erased some of the investors’ enthusiasm, hence the reduced trading volume on the platform.
The Never-Ending FUD
Fear, Uncertainty, and Doubt (FUD) might also be a factor prompting an outflow of investors. Binance and its American subsidiary have been the subject of unconfirmed news that has undermined their legitimacy and reputation.
CEO Zhao has been a vocal critic of such rumors, urging his followers on X (Twitter) to ignore media propaganda and misleading information. He also believes that FUD and external pressure have united the Binance community:
“This, in turn, makes us more determined to drive towards our mission, to increase the freedom of money for people all around the world.”