Binance Market Share Drops Massively Amid regulatory Scrutiny

Binance, the biggest cryptocurrency exchange in the world, saw its market share drop a lot this year. This happened after it faced legal problems in the United States. The U.S. Commodity Futures Trading Commission (CFTC) and the Securities and Exchange Commission (SEC) increased their actions against Binance. They accused Binance of moving U.S. customers to its global platform and other issues, like wash trading.

Because of these legal troubles and the recent collapse of another exchange, FTX, investors started moving their money away from Binance. At the beginning of 2023, Binance had about 70% of the market share, but it fell to nearly half in March when the exchange stopped some of its trading deals.

However, Binance is starting to recover. It paid a $4.3 billion fine to the Department of Justice (DOJ) for breaking rules about preventing money laundering, which investors saw as a good sign. Binance is also allowed to keep working in the U.S., which is positive. Now, Binance holds 43.8% of the market, compared to 56.2% held by other exchanges.

Other exchanges grew from 37.7% to 56.2% market share this year, taking over around September when Binance faced more legal challenges. The SEC is still investigating Binance, its U.S. branch, and former CEO Changpeng Zhao. Zhao, who admitted to money laundering in November, will have his trial next year and could face up to 10 years in jail.