Binance, a leading cryptocurrency exchange, has experienced a significant decrease in trading volume, coinciding with the conclusion of zero-fee promotions and ongoing regulatory pressures. The platform's seven-day average volume has dropped by 26% since the beginning of September.
In March, Binance's share of all spot trading fell from 65% to 58.8% within a week following the end of a no-fee campaign for Bitcoin cryptocurrency pairs. The recent drop in volume aligns with the cessation of an incentive that allowed fee-free trading between Bitcoin and the TrueUSD stablecoin. As a result, there was an 89% drop in the seven-day average volume for this specific trading pair.
However, the termination of zero-fee promotions is not the only factor impacting Binance's trade volumes. The platform is also dealing with regulatory hurdles that have further complicated its situation.
Both the US Commodity Futures Trading Commission (CFTC) and the Securities and Exchange Commission (SEC) have initiated legal proceedings against Binance. The charges allege that Binance failed to register with US regulators, a claim that is currently being contested in court by Binance, its founder Changpeng Zhao, and its American operations, including Binance.US.
These legal challenges have threatened Binance's market dominance throughout this year. The platform's trading figures have been affected not only by the conclusion of promotional incentives but also by these ongoing regulatory issues. As Binance navigates these complexities, market observers will be closely monitoring how it maintains its market position amidst these challenges.
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