The Global Crackdown on Binance which Accounts for Nearly 70% Spot Exchange Volume Market Share

The leading cryptocurrency exchange Binance is now being targeted by Thailand’s watchdog, which filed a criminal complaint against them on Friday for operating a digital asset business without a license.

Binance was actually warned by the SEC over its activities in a letter in April, but when they received no response, the Commission filed a criminal complaint with the police, it said.

This is just the latest in a string of crackdowns on the platform by regulators from all over the world.

This week, Cayman Islands’ financial regulator also said Binance wasn’t authorized to operate in the territory.

The Monetary Authority of Singapore (MAS) joined in, saying it would follow up with the local unit of Binance because of scrutiny from authorities elsewhere.

Before this, last week, Britain's financial watchdog barred the company from carrying out regulated activities in the country, and before that, Japan’s regulator said the exchange was operating in the country illegally.

Binance has already restricted its services for Ontario, Canada users citing “compliance efforts,” after the Ontario Securities Commission (OSC) published a Statement of Allegations against other crypto exchanges viz. Bybit, Poloniex, and KuCoin, for failing to comply with its regulations.

In the US, it is under investigation by the Justice Department and Internal Revenue Service. Back in April, Germany's watchdog also said it risked being fined for offering tokens connected to stocks.

Binance meanwhile maintains that it takes a collaborative approach to work with regulators and takes its compliance obligations seriously.

The concerns seem to be about Binance’s lack of a headquarters, with the UK's Financial Conduct Authority (FCA) calling it a “huge issue.”

“Everybody’s definition of a headquarters of a company is slightly different,” reiterated Binance CEO Changpeng “CZ” Zhao at Ethereal Virtual Summit earlier this year. “Our leadership team are not sitting in one office, we don’t have a clear place where we can go.”

Launched in 2017, Binance has grown tremendously over this short period and now accounts for 69.7% of legitimate centralized spot exchange volume. Coinbase only accounts for 8%, followed by FTX at 4.3%, and Kraken at 4.1%.

While trading volumes at the exchange have fallen to $662 billion in June, they are still up 10x from a year earlier. Overall volumes in the market are also down 65% from the late-May peak to be at early February level but still up 15x from July 2020.

Amidst this crackdown, Binance’s native token BNB, the 5th largest coin with a market cap of $46.5 billion, has experienced a drawdown of 68% in line with the broad crypto market sell-off.

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