Binance, the largest cryptocurrency exchange globally, is facing significant challenges due to increased regulatory scrutiny. Its market share has dropped to a one-year low, reaching 56% as of June 19, the lowest since August of the previous year. The decline in market share can be attributed to lawsuits filed by the US Securities and Exchange Commission (SEC) and the US Commodity Futures Trading Commission. In addition to regulatory pressure, traditional finance giants like BlackRock Inc. are entering the crypto space, attracting investors who prefer regulated institutions.
Binance is not the only exchange facing difficulties. Coinbase, another target of the SEC, has also seen its market share decrease. Despite these challenges, Binance still holds a significant advantage in terms of market liquidity and trading volume. The exchange also holds the largest amount of customer tokens.
Although Binance has faced regulatory hurdles and exited several countries, its size and reputation for providing high liquidity may limit the downside to its market share. However, the entrance of traditional finance players and increasing regulatory scrutiny pose ongoing challenges for the exchange.
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