Binance, the leading cryptocurrency exchange by trading volume, faced a challenging year in 2023. The exchange was hit with an SEC lawsuit during a typically quiet period but managed to resolve its issues with US officials, culminating in a substantial settlement.
Binance’s Legal Journey
Legal troubles for Binance began with a CFTC lawsuit and impending conclusions to a Department of Justice investigation, causing investor concern. The exchange’s initial non-compliance with regulations, including KYC and anti-money laundering protocols, were at the heart of these investigations.
Despite enhancing its compliance efforts in 2021, Binance’s past oversights could not be completely erased. By November 2023, the company settled its dues with a $4.3 billion fine, effectively starting anew.
Currently under the watch of a US-appointed auditor, Binance continues to face scrutiny from the SEC. However, the exchange is expected to emerge from this situation similarly to Coinbase, given other US institutions’ rebuttals against the SEC’s claims.
Following the settlement, Binance’s market share increased to 49%, as reported by Kaiko. This recovery came after a dip in its dominance, with its spot market share falling from 55.2% in January 2023 to 34.3% by September. Despite a significant net outflow in June, the market responded positively to the November settlement, and Binance added 40 million users in 2023. A spokesperson affirmed the company’s commitment to user-centric decisions, ensuring continued trust in the platform.
