After being found guilty of multiple charges, Binance recovered market share following a settlement worth $4.3 billion with the United States Department of Justice (DOJ).
After spending so much time in the crypto news media in a negative light, crypto exchange Binance has started to pull back some of the accolades the exchange has been known for getting in the past.
The biggest crypto exchange in the world by trading volume at one time, Binance, has started to recover its trading volume market share, months after the firm settled its case with the United States Department of Justice, in which the exchange had to pay a mammoth fine of $4.3 billion to settle the lawsuit.
Data from crypto research firm Kaiko shows that Binance’s trading volume market share has risen to 49%. The rise in the market share took about two months since Binance settled its lawsuit with the DOJ.
The increase marked a notable recovery for the exchange, which had previously faced multiyear lows while navigating its legal challenges.
Crypto Data provider firm CCData shared a report in which it mentioned that at the start of 2023, Binance showed very good numbers when it came to capturing the share in the spot cryptocurrency market.
The report showed that in January 2023, Binance had a commendable 55.2% share of the spot market, but the exchange suffered multiple blows during the year, and by September 2023, its share dropped to as low as 34.3%.
Blockchain analytics firm Nansen published a report in June 2023 stating that Binance experienced a net outflow of $2.36 billion from the exchange. Data aggregator DefiLlama reported that the figure was even higher, amounting to $3.35 billion.
Despite these reports, the CEO of Binance at the time, Changpeng Zhao, downplayed these numbers as he raised issues regarding the accuracy of the data. CZ argued that third-party analytics firms might label changes in asset management as outflows, potentially leading to inaccuracies in the reported figures.
Despite these reports, Changpeng Zhao, the former CEO of Binance, raised concerns about the accuracy of the data. He argued that third-party analytics firms might label changes in asset management as outflows, potentially leading to inaccuracies in the reported figures.
We will explain the point with an example for those needing clarification on his meaning.
If a user converts their cryptocurrency holdings into fiat currency or swaps one cryptocurrency for another within the Binance exchange, it could be interpreted as an outflow of funds from the perspective of these analytics firms.
In this case, the broad classification may lead to a potential overestimation of the amount of assets leaving the exchange regarding withdrawals to external wallets or other platforms.
Even though Binance faced tough competition from its competitors when it came to capturing the market share, and while facing regulatory scrutiny and implications along the way, Binance still managed to gain an additional 40 million users in 2023.
The exchange boasted that this represented an almost 30% surge compared to the previous year, attributing the growth to increased adoption of its essential services.
According to Cointelegraph, a spokesperson from Binance said that the exchange has decided to focus more on its customer base, move on from the challenges it faced in the past, and head towards a new chapter.
The statement read: “At Binance, our focus has always been on putting users at the centre of every decision we make. As a result, users can continue to have confidence in our platform as we move into a new chapter of Binance’s story.”
On November 21, U.S. authorities disclosed a settlement agreement with Binance amounting to $4.3 billion. Attorney General Merrick Garland, in a press release, specified that this sum would address civil regulatory enforcement actions undertaken by various government departments, including the Treasury Department and the Commodity Futures Trading Commission.
Binance, on its part, severed ties with its founder and CEO at the time, Changpeng Zhao, and appointed Richard Teng as the new CEO. The exchange has since then reiterated its commitment to following every rule the regulatory authorities have stated in the letter and ensuring that the exchange is in full compliance with the current crypto regulations.
