Increasing legal problems and concerns about the safety of funds on Binance led to a migration of traders who prefer to trade on Asian exchanges Huobi, OKX, and Upbit. Binance lost a total of about 18% of its spot market share in the past few months.
Kaiko reported that Binance, the largest cryptocurrency exchange by trading volume, saw its spot market share shrink by 18%. Analysts estimate the crypto exchange’s current spot trading share to be 51%, down from 73% in March 2023.
Binance’s market share began to decline rapidly in early April, following the elimination of its zero-fee trading program, which had previously been one of the most appealing features of the platform.
Analysts point out that traders started to prefer Asian exchanges such as Huobi, OKX, and Upbit that showed an increase in trading volumes after the cancellation of zero fees on Binance. Thus, the market share held by the South Korean platforms went up from less than 8% to about 14%.
Analysts note that concerns among investors and traders are primarily caused by the exchange’s recent legal issues related to the U.S. Commodity Futures Trading Commission (CTFC) lawsuit against Binance and its CEO Changpeng Zhao. As a result, many users began to migrate to other platforms in search of risk mitigation.
The fact that Binance announced its exit from the Canadian market also added fuel to the fire. This step was taken in response to new guidelines set by Canadian regulators, which greatly affected the entire crypto industry in the country. For example, new rules from the Canadian SEC prohibit exchanges from allowing Canadian customers to buy and sell crypto-assets, defining stablecoins as securities. This regulatory approach is considered unacceptable by Binance’s executives.
In March, the cryptocurrency exchange OKX announced its exit from the Canadian market. Then in April, the decentralized exchange dYdX and the blockchain company Paxos followed suit.
