Experts at Kaiko Research believe that the stringent actions undertaken by regulators in the United States have prompted investors to withdraw their assets from Binance in large numbers. The impact has been particularly significant on Binance.US, the American subsidiary of the trading platform.
“The legal proceedings initiated by the US Commodity Futures Trading Commission (CFTC) and the Securities and Exchange Commission (SEC) have inflicted substantial financial and reputational harm on Binance.US, resulting in a massive liquidity outflow and diminishing its market share in the US almost entirely,” stated Kaiko Research.
Consequently, Binance’s global market share has experienced a drop of nearly 20%, settling at around 43% compared to its peak of 62.3% in January.
Despite the legal tensions and regulatory challenges, Kaiko experts assert that Binance has managed to reverse the negative trend and regain some of its position in the market. The recent voluntary settlement of a $4.3 billion fine with the Department of Justice (DOJ) and the approval for Binance.US to continue operating in the US are viewed as positive developments.
Prior to this, Yi He, the co-founder of Binance, announced the company’s plans to establish a fully-fledged headquarters and establish a board of directors.