Regulatory Pressure Hits Binance as Trading Volumes Plunge

In September 2024, Binance experienced a significant drop in trading volumes, marking its lowest point since late 2023.

Data from CCData revealed a 21% fall in the exchange’s derivatives market, bringing volumes down to $1.25 trillion—the weakest since October 2023. This reduction saw Binance’s share of the derivatives market fall to 40.7%, a sharp decline for the exchange, which has long dominated this space.

Spot trading also took a hit, shrinking by 22.9% to $344 billion, its lowest since November 2023, causing Binance’s global market share in spot trading to dip to 27%, its smallest since 2021. Overall, the exchange’s combined market share across derivatives and spot trading dropped to 36.6%, a level not seen in three years.

Regulatory challenges have played a significant role in Binance’s recent struggles. The exchange has been under increased scrutiny since early 2023 and faced a lawsuit from the U.S. Securities and Exchange Commission in June, accusing it of operating without proper registration and selling unregulated securities.

Binance eventually settled for $4.3 billion, and its founder, Changpeng Zhao, served a brief sentence after being charged with violations related to financial secrecy laws. His plea deal bars him from returning to leadership at Binance.

Meanwhile, Crypto.com reported notable growth during the same period, with spot trading volumes climbing by 40.2% and derivatives activity rising by 42.8%, making it the fourth-largest exchange by volume.

Despite these trends, overall trading activity across centralized exchanges was down, reflecting typical seasonal lows, though analysts expect this could shift as liquidity potentially increases in the coming months.