Binance.US in Turmoil: What’s Behind the 98% Drop in Trading Volume?

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Binance US, once seen as a compliant crypto exchange, is currently grappling with legal and operational challenges. It’s in hot water for not providing over 250 requested documents to the SEC. This has sparked concern and uncertainty within the crypto community about Binance’s stability and its role in the future of cryptocurrencies. Inv

estors are closely monitoring the platform’s trading activity for clues about its fate.

Binance.us Trading Volume Decline With Only $2.97 Million Traded on Sept

From January to August 2023, its monthly trading volume plummeted by a staggering 98%, with further drops expected for September. Over a single weekend, its trading volume fell to $5.09 million, down from about $230 million on September 17, 2023. The decline coincided with legal actions taken against Binance CEO Changpeng Zhao by the US Commodity Futures Trading Commission and the Securities and Exchange Commission.

Internal and Regulatory Push is Drifting Binance.US

The bubbles are popping from inside the firm with the resignation of key executives like CEO Brian Shorder, Head of Legal Krishna Juvvadi, and Chief Risk Officer Sidney Majalya. This exodus, noted by the SEC, underscores the urgency of investigating these matters. Meanwhile, the SEC faced a setback in gaining immediate access to Binance.US’s software, highlighting the ongoing friction between the regulator and the exchange.

But What’s Causing the Decline? 

This sudden drop is a clear case that investors are fearing an FTX-like explosion soon. Concerns about legal issues or other uncertainties could also be prompting traders to seek alternative platforms. This decline in trading activity serves as a cautionary signal, not only for Binance.US but for the broader US cryptocurrency industry. Recently Coinbase and Gemini have surged in trading activity since Coinbase is in a stronger position in lawsuit than Binance. 

Comparative Trading Volumes

For perspective, Coinbase Global Inc., the largest crypto exchange in the US, reported a daily trading volume of $948 million, significantly outperforming Binance.US’s $10.5 million. This further underscores the challenges faced by Binance.US in retaining its market share and user base.