CEX Falling Due to Tight Regulations Even Before SEC Lawsuit, Trading Volume Reaches 4-year Lows

With the US regulatory bodies tightening their grip on the crypto industry, the centralized trading exchange platforms are experiencing the lowest trading volume levels in more than four years. The monthly trading volumes show a downfall for these exchanges in May and are continuing on this path.

Analytics by CCData

The June 7 crypto analytic reports from CCData show a 15.7% fall in combined spot and derivatives trading volume in May from last month. The data marks the second consecutive month of diminishing crypto trading activity.

Since the CCData reports only the May month’s activity, it does not include the recent lawsuits SEC has filed against Binance and Coinbase for flouting legal regulations. According to CCData reports, Binance has faced the most out of all platforms.

Binance Downfall- CCData Reports

Binance peaked its market share in February, achieving 57% of the market. However, the month of May found it at a low of 43%, thus observing the third consecutive month of Binance’s market share falling.

The declining market share of Binance can be ascribed to the elimination of zero-fee trading for USDT pairs. However, it is also clear that Binance is feeling the tightened scrutiny by US regulators on their activities.

Binance’s share falling benefitted Bullish, BitMex, and Bybit the most, with each exchange gaining higher than 1% market share between March and May.

SEC Against Binance and Its Impact

June 5 saw the SEC filing a case against Binance for not registering as a security exchange and offering unregistered securities to investors. The 24 hours following this announcement showcased $778 million worth of net outflows from the platform. In response, Binance clarified its stance on the safety of public assets.

A further 48 hours for the three leading decentralized exchanges saw a jump of 444% in the median trading volume. Although the overall trading volumes are dimming, attributing most of it to spot trading, derivative trading market share has enhanced across centralized exchanges. It has led to a new record in the process.

The report keeps centralized exchange derivative markets to have snatched 79.5% of the crypto market. It’s a 1.3 percent rise from the 78.3 in April. However, the total derivatives trading volume dampened in May by 14.4%.

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