Binance Regains Trading Volume Market Share Following Settlement with US DOJ

Binance's market share in trading volume recovered to 49% two months after resolving its case with the US Department of Justice and paying a settlement of $4.3 billion.

Binance recovers market share in trading volume after settlement with US DOJ

Last updated: January 30, 2024 04:29 EST | 3 min read

Cryptocurrency exchange Binance has experienced a remarkable recovery in its trading volume market share, bouncing back to 49% just two months after settling its case with the United States Department of Justice (DOJ) and paying a staggering $4.3 billion settlement fine.

The data, provided by crypto research firm Kaiko, reveals a positive trend for Binance following multi-year lows in its market share as the exchange grappled with legal challenges.

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Despite encountering setbacks in its spot market share throughout 2023, Binance has managed to regain its footing. From holding a 55.2% share in January 2023, the exchange saw a decline to as low as 34.3% in September of the same year, as reported by crypto data provider CCData.

Binance’s Market Share Bounces Back Post-Settlement

In June 2023, analytics firm Nansen reported a net outflow of $2.36 billion from Binance, while data aggregator DefiLlama reported an even higher figure of $3.35 billion. The accuracy of these numbers has been disputed by Binance’s former CEO, Changpeng Zhao, who suggested that third-party analytics firms may not always accurately measure changes in assets under management.

Despite the challenges to its market share, Binance reported a significant gain of 40 million more users in 2023, representing a nearly 30% increase compared to the previous year. The exchange emphasized its growth in key services and reiterated its commitment to placing users at the center of its decision-making.

Binance finalized its $4.3 billion settlement with U.S. officials on November 21, 2023, covering civil regulatory enforcement actions by government departments, including the Treasury and Commodity Futures Trading Commission (CFTC). The recent recovery in market share suggests a positive trajectory for Binance in the wake of resolving its legal issues.

Following the settlement between the Department of the Treasury and the Commodity Futures Trading Commission, Binance experienced a decline in market share among non-USD exchanges. The market share slipped from over 70% at the beginning of 2023 to a low of 44% around the time of the settlement.

Data from Kaiko, which compares Binance’s trading volume to 23 other centralized exchanges, indicates that the exchange’s market share remained relatively flat immediately after the settlement. However, it subsequently regained the 50% level, showcasing resilience post-settlement. Kaiko attributes this recovery to a combination of zero-fee promotions on the platform and the hype surrounding spot bitcoin ETFs in December and January.

In contrast, data from The Block, comparing Binance against 21 other exchanges, reflects a lower market share of around 46%, still significantly down from a peak of 71% in December 2022. Despite the legal and regulatory challenges Binance faces, the recent recovery in market share suggests a positive trajectory for the exchange after settling its legal issues.

Binance Reports Positive Growth in Crypto Services Despite Regulatory Challenges

In December 2023, Binance reported growth in services related to crypto payments, P2P trading, and earnings. Users using Binance Pay or Card grew by 54%, and the P2P platform processed 18% more trades than the previous year. The platform also added that its Binance Earn program supported over 362 assets across its Simple Earn suite and served 35% more users than last year.

The cryptocurrency exchange has now reached over 170 million registered users, offering 431 assets across 1785 trading pairs by the end of 2023. The proof-of-reserves system was extended to 31 tokens, a notable increase from the previous year’s nine. Binance also introduced its Web3 Wallet.

According to recent data from various sources, the cryptocurrency exchange, which faced a tumultuous 2023 with legal and regulatory challenges, is displaying signs of market share recovery. Binance had a disastrous 2023 on the legal and regulatory front, including the settlement with the Department of Justice, the Department of the Treasury, and the Commodity Futures Trading Commission, concluding a criminal investigation into allegations of money laundering and sanctions violations—marking one of the largest corporate settlements in U.S. history.

Additional Q&A Content

Q: What were the legal challenges faced by Binance in 2023?

A: In 2023, Binance faced various legal and regulatory challenges, including a settlement with the United States Department of Justice, the Department of the Treasury, and the Commodity Futures Trading Commission. These actions resulted from a criminal investigation into allegations of money laundering and sanctions violations.

Q: How has Binance managed to recover its market share?

A: Binance has managed to recover its market share through a combination of factors. It implemented zero-fee promotions on its platform and capitalized on the hype surrounding spot bitcoin exchange-traded funds (ETFs). These strategies, along with the resilience of the exchange, have contributed to its market share recovery.

Q: How many users did Binance gain in 2023?

A: Binance gained an impressive 40 million more users in 2023, representing a nearly 30% increase compared to the previous year. This growth demonstrates the exchange’s ability to attract and retain users despite the legal and regulatory challenges it faced.

Q: What services experienced positive growth on Binance despite regulatory challenges?

A: Despite regulatory challenges, Binance reported positive growth in services related to crypto payments, P2P trading, and earnings. Use of Binance Pay and Card grew by 54%, and the P2P platform processed 18% more trades than the previous year. The Binance Earn program also supported a larger number of assets and served more users compared to the previous year.

Reference Links

1. Kaiko research firm Twitter post
2. Binance’s spot market share decline report by CCData
3. Binance market share data analysis by Cyber Magazines
4. Binance’s growth in services report by Binance
5. Binance’s legal challenges and settlement report by Google News

Remember, knowledge is power in the world of cryptocurrency! Stay informed and make wise investment choices. 🚀

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