Binance.US‘ weekly trade volume has plunged dramatically from an annual high of nearly $5 billion to a mere $40 million, crypto data firm Kaiko tweeted on Sep 18.
This drop was exacerbated in June by extensive charges filed by the U.S. Securities and Exchange Commission (SEC) against Binance and its affiliates. The SEC accused Binance of multiple violations, including unauthorized access to the U.S. market, and declared several cryptocurrencies, including Binance’s BNB and BUSD, as securities.
Furthermore, Binance.US announced its transition to a ‘crypto-only’ exchange in June after losing its banking partners in the U.S. This regulatory scrutiny has doubtlessly impacted Binance.US’s operations and its trading volume.
In addition to the charges, Binance.US has seen several executives resign in recent weeks. The departures include Head of Legal, Krishna Juvvadi, and Chief Risk Officer Sidney Majalya, with reports indicating that Binance.US CEO Brian Shroder has also left his position. These departures, coupled with the reduction of some services due to broader regulatory difficulties, indicate Binance.US is undergoing significant internal changes, which may be contributing to the trading volume decline.
Scrutiny of Binance’s trading practices has also intensified. The SEC claimed that extensive wash trading took place due to Sigma Chain’s role as a market maker, contributing to an overstated trading volume. Furthermore, Alameda Research, a prominent quantitative trading firm, was often the only counterparty for Binance.US’s over-the-counter trades. These factors point to potential inaccuracies in Binance.US’s reported trading volumes in the past.
The recent hardships faced by Binance.US underscore the extent to which regulatory oversight and internal management issues can impact a crypto exchange’s market activity. While the future of Binance.US remains uncertain, it is clear that its current trajectory represents a radical departure from its previous high-volume trading activity. As the crypto industry continues to evolve under increasing regulatory scrutiny, exchanges like Binance.US must strive to ensure compliance and stability to maintain market confidence.