It appears that problems for the Cryptocurrency exchange Binance are mounting from both sides of the pond: the U.S. and Europe. While the company faces challenges from the Securities and Exchange Commission’s crackdown on the crypto market in the U.S., a Wall Street Journal report highlighted that the firm is encountering difficulties in maintaining its presence in Europe.
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According to the report, Binance opened a regional headquarters in Paris in 2022 with the aim of expanding its presence in Europe. However, contrary to expectations, the company did not achieve that goal. Last month, Binance announced that it was leaving the Netherlands as it failed to secure a VASP (virtual asset service provider) license from the Dutch regulator.
Meanwhile, Belgium’s SSMA (Financial Services and Markets Authority) ordered Binance to stop its operations in the country as it was offering trading and wallet custody services from countries that are prohibited (countries that are not members of the European Economic Area).
Quarterly Trade Volume Plunges
Given the tight regulatory scrutiny and litigation against the crypto firms, the crypto trade volume dipped to the lowest level since 2020, according to Kaiko, a crypto research firm.
In its latest report, Kaiko highlighted that spot trade volumes for cryptocurrencies have plunged in the second quarter, with Binance marking the most significant decline. For Binance, volumes dropped by about 70%. The report stated that the reintroduction of fees for its Bitcoin (BTC-USD) pairs irked investors.
However, the report also highlighted that other platforms, including Coinbase Global (NASDAQ:COIN), also marked a decline of more than 50% in volumes, indicating that regulatory scrutiny is dampening investors’ sentiments.
Will BNB Go Up Again?
Amid regulatory challenges across its key markets, Binance Coin (BNB-USD) has declined about 22% in the last three months. BNB’s underperformance has also weighed on the two major cryptocurrencies, Bitcoin and Ethereum (ETH-USD).
While BNB could stay under pressure in the short term, easing regulatory headwinds could help it regain its highs.
