Bitcoin (BTC) Trading Volume on Binance Plummets by Over Half

Bitcoin (BTC) trading volume on Binance has seen a significant decline over the past month, according to data from K33 Research.

Bitcoin (BTC) Trading Volume on Binance Drops by Over Half. Image: Bloomberg

Legal controversies with U.S. regulators and global regulatory tightening have severely impacted Bitcoin (BTC) trading volumes on Binance for several months.

According to aggregated data by K33 Research, the average spot Bitcoin trading volume on Binance has dropped by 57% since the beginning of September. In contrast, competitor Coinbase has seen a 9% increase over the same reference period.

Average 7-day Bitcoin (BTC) trading volume on Binance. Source: K33 Research

Binance's decline stems from legal difficulties that the world's largest cryptocurrency exchange has been facing. Since June of this year, the U.S. Securities and Exchange Commission (SEC) and the Commodity Futures Trading Commission (CFTC) have filed lawsuits against Binance, Binance.US, and CEO Changpeng Zhao (CZ) for violating U.S. securities laws. Additionally, the U.S. Department of Justice (DOJ) has been considering criminal charges against the exchange, fearing systemic implications across the entire industry.

Vetle Lunde, a researcher at K33 Research, commented:

"The lawsuits with the DOJ and SEC have deterred market makers from trading on Binance, and this partly explains the decline. Some organizations may have shifted to other exchanges. It's almost certain that Binance's woes are adversely affecting trading volumes in the market."

Legal storms have also expelled Binance from the UK, Netherlands, Belgium, Cyprus, Brazil, Austria, France, Germany, Australia, Nigeria, and more...

Weekly chart of BTC trading pairs with stablecoins on Binance, screenshot taken at 09:35 AM on September 20, 2023

Furthermore, the removal of the fee-free Bitcoin trading program with TrueUSD (TUSD) on September 7, one of the most liquid trading pairs on the platform, has contributed to the stagnation of Bitcoin transactions. Conversely, Binance's favoritism towards the new stablecoin FDUSD has led to its trading volume dominating over other stablecoin pairs.

• Read more: FDUSD market cap up 51% in 30 days, poised to enter top 10 stablecoins

Additionally, Binance.US is experiencing a similar fate to its parent company. Data from Kaiko shows that the overall weekly trading volume on this U.S. branch has plummeted from nearly $5 billion earlier this year to just $40 million, a decrease of almost 99%.

During this period, both Binance and Binance.US have undergone personnel restructuring and witnessed the departure of several senior executives.