Crypto Arena’s Giant Exchange Continues to Lose Strength as It Deals with Problems: What Happened?

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One of the world’s leading crypto exchanges Binance ‘s average daily transaction volume has fallen below $10 billion in recent weeks. In this context, 60% compared to last year’s average of 20-30 billion dollars. decreased.

The drop comes as Binance is under intense regulatory scrutiny and is seeking a $4 billion payout from the U.S. Department of Justice (DOJ) as a settlement for all allegations involving violations of federal security laws.

According to blockchain data analysis platform Kaiko, Binance facilitated the majority of 2022 trading volume by offering zero-fee transactions. This free model was halted earlier this year but could not prevent trading activity from contracting.

Amid intense regulatory scrutiny from the US, volumes continue to decline even though charges have not been formally filed by the DOJ as of November 20.

While the $4 billion payment demand is quite hefty, the exchange will likely enter into a deferred prosecution agreement with the U.S. government, which could allow them to pay the fines within two years.

However, facing $4 billion in payment demands could pose significant challenges for the exchange as it changes its business model to comply with intensified regulations exacerbated by falling trading volume, Kaiko said.

As such, the sharp decline in volume suggests that traders and protocols are moving away from BNB Chain and Binance in response to regulatory uncertainty. In light of this, and as seen from Kaiko’s data, rival exchanges that emphasize regulatory compliance in major jurisdictions, including the US and others, may be positioned to take over Binance’s market share.

In addition to the fine, the exchange’s CEO, Changpeng Zhao, also faces direct criminal charges, which he would have to potentially settle with the US government.

Koinfinans.com As we reported, in June 2023, the SEC filed a lawsuit against Binance and Zhao. The case involved 13 charges, including the sale of unregistered securities.

Shortly thereafter, the regulator requested that Binance.US’ digital assets be frozen. As a result, users lost the ability to deposit USD. This led to sales by those who wanted to withdraw money in fiat.


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