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According to a recent report from Bloomberg, Binance, the world’s largest cryptocurrency exchange by trading volume, is facing significant challenges as its market share continues to decline.
In September, Binance shares rose from trading volume in the roughly $2 trillion digital asset market fell to 36.6%, down sharply from 42.7% at the start of the year and the lowest level in four years, according to CCData data.
Binance Spot and Derivatives Trading Hits Four-Year Low
The decline in market share is particularly pronounced in both spot and derivatives trading. Binance’s 27% share of the spot market represents the lowest level since January 2021, while the share of derivatives trading stands at 40.7%, also the lowest in four years.
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According to the reportcan this decline be attributed to the legal saga that the exchange has been going through since last year globally, but especially in the US, which has not only had a notable impact on the exchange’s financials but also led to changes in its leadership . .
The company is under increased supervision worldwide, after a settlement with the U.S. Department of Justice (DOJ) last year over serious charges, including sanctions violations, that resulted in a hefty $4 billion fine.
The fallout from these regulatory actions included the dismissal of co-founder and former CEO Changpeng Zhao (CZ), who served four months in prison as part of the proceedings. However, the former CEO was issued by US authorities last Friday after serving his sentence.
In an effort to rebuild trust and navigate the regulatory landscape, Binance has appointed Richard Teng, a former regulator, as its new CEO. Teng has been actively involved with regulators investigating Binance in various jurisdictions name a new board of directors and intentions to establish a new headquarters.
Centralized crypto exchanges face a 17% drop in volume
The report further highlights that the broader centralized crypto exchange market is also facing challenges, with combined spot and derivatives trading volumes falling 17% in September.
However, this decline is typical of the month, which is often seasonally weak, but has resulted in the lowest monthly figures trading activity since June. Notably, Binance has seen the most severe market share decline among the top exchanges as competitors like Bybit, Bitget, and Crypto.com begin to capture a larger share of the market.
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Jacob Joseph, a senior research analyst at CCData, noted that this trend may indicate growing trust among crypto participants in alternative platforms that “offer similar user experiences,” including low trading costs, minimal slippage and high market liquidity.
Despite the challenges, Binance recently achieved a major milestone: it became the first centralized one crypto exchange According to CCData, total trading volume will surpass $100 trillion.
At the time of writing, the exchange’s original token was, BNBcurrently the fourth largest cryptocurrency on the market, trading at $545, up just 1% in the past 24 hours amid the broader market decline.
Featured image of DALL-E, chart from TradingView.com
