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

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

Its share of trading volume has sunk to 54% from 70% two weeks ago, according to data from research platform Kaiko. That’s the lowest level since Nov. 5 and the lowest sustained market share since August, Kaiko said.

The U.S. Commodity Futures Trading Commission 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,” Kaiko said.

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

In the U.S., crypto exchange Coinbase's (COIN) market share dropped in the first quarter, falling to a weekly average of 49% from 60% during the quarter, while Binance.US picked up the slack. Its share rose to 24% from 8% during the quarter, Kaiko said.