Binance, which is one of the top cryptocurrency exchanges, went through a challenging period recently due to legal issues with the US Department of Justice (DOJ).
As a result of violating US laws related to money laundering and sanction violations, Binance had to pay a hefty fine of $4.3 billion. Along with that, Changpeng "CZ" Zhao, the well-known CEO of Binance, resigned from his position.
While Binance managed to maintain its position as the world's leading crypto exchange, this crisis has allowed its competitors to gain ground in the expanding crypto market.
Let us evaluate the growth of Binance competitors gaining traction as Binance loses users.
Coinbase Crypto Exchange
Amid reports of Binance's regulatory woes, Coinbase, the largest crypto exchange in the United States, has witnessed significant traction over the past few weeks.
This exchange has been growing exponentially, and Binance has suffered losses.
Notably, Coinbase's market stock, COIN, experienced a remarkable 75% surge in the last month, which surprised users.
The exchange's market share also grew by 34%.
Intriguingly, most of Coinbase's growth occurred during trading hours in Europe and Eastern Asia, signaling its potential to benefit from the forthcoming bull market.
Bybit Crypto Exchange
Bybit is a cryptocurrency exchange founded in 2018 and headquartered in Dubai, United Arab Emirates.
Since the fall of Binance due to users' decreases and low daily trading volume, Bybit has been gaining traction in the crypto space.
Thus, a Dubai-based crypto exchange has also emerged as a beneficiary amid Binance's challenges.
According to Kaiko, a blockchain research firm, Bybit witnessed continuous growth, expanding its market share by 50% following Binance's settlement, which was the best moment ever for the team.
Similarly, the OKX exchange experienced some gains in market share, particularly during trading hours in Western Europe.
Binance's Market Dominance
Despite the notable gains made by Coinbase and Bybit, Binance has only encountered 4% market share, allowing it to retain its dominance with nearly 40% share.
Kaiko's report suggests that Binance experienced significant outflows post-settlement news.
However, the exchange remains a market liquidity leader for Bitcoin, the premier cryptocurrency, and altcoins.
Acknowledging the impact of the settlement announcement, Binance observed a widened spread for its top BTC instrument on November 21.
However, the spread decreased over time, indicating increased market stability and reduced uncertainty.
These developments suggest that Binance is striving to regain its composure and restore user confidence.
Binance Promotion Drags Cristiano Ronaldo
In a recent legal dispute, Binance is accused of promoting and selling unregistered securities on its platform through Cristiano Ronaldo's endorsement of the cryptocurrency exchange.
As part of a strategic partnership to attract new users, Ronaldo collaborated with Binance to promote non-fungible tokens (NFTs) connected to the platform. If you've been using Binance, you'll notice it.
The lawsuit alleges that Ronaldo participated in the sale of unregistered securities. It further claims that, given Ronaldo's investment experience and vast resources, he should have been aware of Binance's involvement in selling such securities.
The plaintiffs argue that Ronaldo failed to disclose crucial information to his followers, potentially influencing their investment decisions.
The focal point of the legal action revolves around Ronaldo allegedly not complying with the Securities and Exchange Commission's guidelines, which require celebrities endorsing cryptocurrencies to disclose the payments received for such promotions.