As the top crypto exchange in the world, Binance has seen a remarkable decline in its market share over the past two weeks. Data from the research firm Kaiko reveals that the market share of Binance has dropped from 70% to 54%, its lowest market share since November 5th and August before that. This decline is largely attributed to the fact that U.S. Commodity Futures Trading Commission (CFTC) filed a lawsuit against the exchange and its founder Changpeng Zhao on March 27th. This lawsuit alleges that Binance and Zhao provided unauthorized crypto derivatives products in the U.S., which violates federal laws.

Apart from the lawsuit, another reason for the decline in Binance's market share is that the exchange ended its no-fee trading promotion for 13 Bitcoin spot trading pairs. This led to a drastic decrease in the trading volume of Bitcoin as well, since it fell to its lowest since July 2022. The march 27th halt marked an end to the Binance's excess volume, hence evenly dispersing market share among the remaining exchanges.

In the U.S., Coinbase's market share has also seen a decline in the first quarter, going from 60% to 49%. This was balanced out by an increase in the market share of Binance.US, which surged from 8% to 24%, according to Kaiko.

Overall, the increased involvement of authorities in the crypto scene, in addition to other factors is causing a shift in power among the crypto exchanges. Particularly in the U.S., which is achieving an especially fragile market environment due to the presence of regulators. It remains to be seen how this shift will continue in the future, but it's safe to say that crypto exchanges must adapt and comply with regulations or find other alternatives if they want to remain at the top.



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