Binance Market Share Hits Lowest Since November After CFTC Lawsuit, End of Zero-Fee Trading

Binance remains the world’s largest crypto exchange by volume, but it’s seen a dramatic drop in market share after a U.S. regulator accused it of fraud and the exchange eliminated zero-fee trading for some trading pairs.

Its market share relative to other crypto exchanges has sunk to 54% from 70% two weeks ago, according to veri from research platform Kaiko. That’s the lowest since Nov. 5 and the lowest sustained market share since August, Kaiko said.

The U.S. Commodity Futures Trading Commission (CFTC) sued the exchange and founder Changpeng Zhao on March 27, alleging they offered unregistered crypto derivatives products in the U.S. against federal law.

Binance also witnessed its lowest bitcoin (BTC) trading volume since July 2022 on March 27 after it halted its no-fee trading promotion for 13 bitcoin spot trading pairs. “Binance’s excess volume largely vanished with the end of zero-fee trading, which was reflected in an even dispersal in market share among the remaining exchanges,” according to a Kaiko report.

Kaiko noted that as küresel exchanges are increasingly getting targeted by regulators, the U.S. market is particularly fragile right now for the remaining crypto exchanges.

In the U.S., crypto exchange Coinbase also saw its market share drop in the first quarter. Coinbase went from a weekly average of 60% to 49% while Binance.US picked up the slack, surging from 8% to 24%, Kaiko said.

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Edited by Nick Baker.

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