Binance Is The World's Largest Exchange By Volume — Can It Keep The Crown?

The exchange attends to over 30 million users daily, with over 350 coins available for trading. Spot trading, futures contracts trading, margin trading, and p2p trading are all available on Binance. The exchange also has a Liquid Swap feature for quick swapping of coins, a Launchpad dedicated to new crypto projects, and a savings deposit feature.

Dominating the Crypto Space

The abundance of options Binance presents to its users, coupled with an outstanding user interface, has ensured the exchange cements its place at the top of the standings. Truly, volume-wise, no other crypto exchange comes close. Binance recorded over $100 billion in trading volume daily and has handled trades worth trillions of dollars monthly. In comparison, OKEx comes in second in terms of daily volume, recording around $30 billion— a far cry from Binance’s trading volume. Coinbase, America’s biggest exchange handles transactions worth less than $10 billion, daily. (All figures and values were recorded on Thursday, November 4, 2021)

Changpeng Zhao, known on social media and throughout the world as CZ, founded the Binance Exchange in 2017. Binance had originally headquartered in China but had to relocate to its present location in the Cayman Islands and Seychelles. The centralized exchange claims it is registered in the Cayman Islands, and its services are accessible globally, except in the United States, where Binance US is the registered entity.

All is Not Well

Recently, Binance has been troubled on all sides with regulatory restrictions and investigations that have led to its services being restricted in several countries. Since 2020, regulators from all over the world have singled out Binance for complicity in financial crime, lack of transparency, and illegal operations within their respective regions. Some notable cases between the exchange and financial regulators include:

  • In the United States, Binance is under investigation by the US Justice Department and the IRS. Also, the US Commodity Futures Trading Commission (CFTC) is investigating the trading of cryptocurrency derivatives by US citizens on the parent Binance platform.
  • In the Cayman Islands, Binance faces scrutiny after the Cayman Islands Monetary Authority (CIMA) declared that the exchange is not authorized to operate from or within the country.
  • In the UK, the Financial Conduct Authority (FCA) claimed it is incapable of supervising Binance effectively and proceeded to ban the exchange from conducting activities for failing to comply with its AML regulation.
  • The Dutch Central Bank, De Nederlandsche Bank (DNB), announced that Binance lacks regulation to provide crypto services in the Netherlands, and warned of violations of its anti-money laundering laws.
  • Japan is widely known as a crypto-inclined nation, but Japan’s Financial Services Agency (FSA) issued a warning to Binance regarding regulations and ordered the exchange to halt operations.
  • Hong Kong’s Securities and Futures Commission (SFC) announced that Binance was not regulated to offer stock services to Hong Kong residents.

Also, banks have begun to cut ties with Binance across Europe and North America, leading the exchange to suspend withdrawals and deposits on customers’ accounts in the affected regions. While these regulatory challenges seem to have not slowed activity on the exchange if they are sustained, users will likely be forced to switch to alternatives.

Predators Are Lurking

As Binance continues to face scrutiny, seeing that it holds the largest market share in the crypto exchange category, other exchanges are swooping in, especially in regions where Binance is banned.

Binance faces fierce competition from Coinbase, OKEx, Huobi Global, FTX, KuCoin, WazirX amongst others, although it owns a slice of some popular exchanges like FTX and WazirX. The exchange continues to do all it can to increase its market share in the crypto space.

Decentralized exchanges are also starting to pile some pressure on their centralized counterparts. Crypto enthusiasts are beginning to lose faith in CEXs, as they represent everything that blockchain technology seeks to upstage— centralization, intermediaries, third parties. DEXs like dYdX, Serum Exchange, and Synthetix are positioned to attract crypto traders with amazing features and the absence of KYC regulations.

Binance remains the top dog among crypto exchanges by a mile. How long they can hold that importance amidst increasing regulatory clampdown and innovations remains to be seen.

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