While Binance continues to be a dominant force in crypto trading, its trading volumes dropped over 20% in September compared to the previous month, while rival Crypto.com saw its volumes surge by more than 40%.
According to data from CCData, Binance’s combined market share in spot and derivatives trading fell to its lowest level since September 2020. Overall, trading volumes in September reached their lowest point since June, but activity is expected to pick up in the final quarter of the year due to anticipated Federal Reserve rate cuts, CCData noted.
Binance’s lead over its competitors shrank to its smallest margin in four years, according to a Thursday report by CCData. The exchange handled 36.6% of total spot and derivatives trading on centralized exchanges, marking its worst performance since September 2020.
The decline was driven by a nearly 23% drop in Binance’s spot trading volumes from August, lowering its spot market share to 27%, the lowest since January 2021. Additionally, its derivatives trading volume fell by 21%, bringing its market share in that segment down to 40.7%—the weakest since September 2020.
Binance has not yet responded to requests for comment on the report.
One of the key beneficiaries of Binance’s decline was Crypto.com, which saw its spot and derivatives trading volume grow by more than 40% month-over-month, according to CCData. Year-to-date, Crypto.com recorded the largest increase in spot trading volume, boosting its market share to 10.5%.
Overall trading activity across crypto exchanges dipped last month, with both derivatives and spot volumes falling by 17%, the report highlighted. September is typically the end of a slower mid-year trading period, leading into a busier final quarter. “With catalysts such as increased liquidity following the Federal Reserve’s anticipated interest rate cuts and the upcoming U.S. elections, trading activity on centralized exchanges is expected to increase in the coming months,” the report stated.
Binance’s declining market share coincides with growing regulatory challenges. Last month, the U.S. Securities and Exchange Commission (SEC) filed an amended complaint against Binance, scrutinizing the exchange’s token listing practices. This followed a June 2023 lawsuit that alleged Binance operated as an unregistered broker, clearinghouse, and trading platform, as well as offering unregistered securities. The exchange agreed to pay $4.3 billion in fines to settle various charges with U.S. regulators.
Additionally, Binance’s founder and former CEO, Changpeng “CZ” Zhao, pleaded guilty to violating the Bank Secrecy Act (BSA) by failing to implement adequate know-your-customer (KYC) systems. He was sentenced to four months in prison but was released last week.
