Binance.US, the American offshoot of the global cryptocurrency exchange Binance, is struggling with a series of unprecedented challenges that might have led to a significant decline in trading activity.

On September 16, 2023, the trading volume on Binance.US plummeted to a mere $5.09 million, according to data from Amberdata on The Tie Terminal. This marks a stark contrast from September 17, 2022, when the exchange boasted a trading volume of approximately $230 million.

Binance.US exchange volume over the past 12 months. Source: The Tie Terminal/Amberdata

The month of September has been particularly bleak for Binance.US, with the lowest point recorded on September 9, when trading activity dipped to just $2.97 million. This drastic drop in trading volume is anticipated for a combination of external and internal factors that have shaken the exchange to its core.

Binance.US’s Regulatory Troubles and SEC’s Lawsuit

One of the most significant blows to Binance.US occurred on June 5, 2023, when the U.S. Securities and Exchange Commission (SEC) filed a lawsuit against both Binance and Binance.US. The charges raised against the exchanges include unregistered securities offerings, wash trading, and other violations.

The SEC alleges that Binance.US failed to register as a broker-dealer and neglected to register the offer and sale of its staking-as-a-service program.

In the wake of this lawsuit, Binance.US took the extraordinary step of suspending trading for more than 100 token pairs. This move triggered a rapid decline in exchange activity and investor confidence.

Leadership Exodus

Adding to the turmoil, Binance.US witnessed a wave of high-level departures in recent weeks. Brian Shorder, the former CEO of Binance.US, stepped down, joining a growing list of global executives who parted ways with the company. Following Shorder’s departure, the Head of Legal, Krishna Juvvadi and the Chief Risk Officer, Sidney Majalya also announced their resignations. Reports of Finance Magnates suggest that these departures are linked to an ongoing investigation by the U.S. authorities, further destabilizing the exchange’s leadership.

Binance’s CEO, Changpeng “CZ” Zhao, and Binance.US. In response to speculation surrounding Shorder’s departure, CZ said on X (formerly Twitter) that the executive was taking a “deserved break.”

CZ wrote: “Under his leadership, Binance.US raised capital, improved its product and service offerings, solidified internal processes, and gained significant market share, all of which helped to build a more resilient company for the benefit of customers. We are grateful for his contributions.”

SEC Allegations of Non-Cooperation

The challenges for Binance.US continue to mount, as the SEC has accused the exchange of non-cooperation in the ongoing investigation. The SEC claims that during the discovery process, Binance.US produced only 220 documents, raising concerns about its commitment to resolving legal disputes. In a recent development, a judge issued an order on September 15, granting the SEC’s motion to unseal documents related to the case. These documents, which were previously sealed or redacted at the SEC’s request, are now set to be made available in the coming days, potentially shedding further light on the exchange’s activities.

The future of Binance.US remains uncertain as it grapples with these multifaceted challenges. Investors and industry observers are closely watching to see how the exchange will navigate its legal troubles, rebuild its leadership team, and regain the trust of the cryptocurrency community.

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