CEX trading volumes fell to 4-year lows even before Binance, Coinbase suits

Trading activity on centralized exchanges has dropped to its lowest point in over four years due to increased oversight from U.S. regulators and legislators.

According to a June 7 report from crypto analytics company CCData, the combined spot and derivatives trading volume in May dropped 15.7% compared to the preceding month, signaling the second consecutive month of declining crypto trading activity.

As the data only extends up to the end of May, it does not reflect any potential effects of the recent SEC lawsuits against Coinbase or Binance.

CCData indicates that out of all the significant companies to experience a decrease in trading amounts, Binance experienced the most severe impact.

In May, Binance’s market share decreased again, dropping from 57% in February to 43% – its lowest point in three months.

The report stated that the majority of the decrease could be attributed to Binance eliminating commission-free trading for USDT pairs, and that the exchange was likely affected by the heightened oversight from U.S. regulators.

The crypto exchanges Bullish, Bybit and BitMEX saw the greatest increase in their market share between March and May, each gaining approximately 1%. This was due to the decrease in Binance’s market share.

On June 5th, the Securities and Exchange Commission (SEC) took legal action against Binance and its CEO, Changpeng Zhao, for not registering as a securities exchange and for providing unregistered securities. Within a day, the net withdrawals from Binance had reached $778 million, though the firm has guaranteed that their funds remain safe.

In the 48 hours that followed, the median trading volume across the top three decentralized exchanges (DEX) increased by 444%.

Binance.US coins are trading at a higher price due to concerns about potential litigation and difficulties in accessing fiat gateways.

Despite a decrease in total trading activity – mainly caused by spot trading – the portion of derivatives trading on centralized exchanges rose, reaching a new high.

The report states that the derivatives market on centralized exchanges now accounts for 79.5% of the total crypto market, a slight rise from 78.3% in April. However, total derivatives volumes dropped by 14.4% in May.

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