Binance to Close Crypto Payment Service as Market Dominance Slips

Binance has announced the shutdown of its cryptocurrency payment platform, Binance Connect, effective August 16, according to a Binance representative who spoke with Forkast on Wednesday.

Quick Facts:

Binance Connect, previously known as “Bifinity,” was introduced by Binance in March 2022 as a fiat-to-crypto payment system. It allowed users to conduct transactions using over 50 cryptocurrencies and make cryptocurrency purchases through conventional channels like Mastercard and Visa.

The decision to close the service is attributed to the evolving market landscape and changing user preferences.

Binance explained in a statement, “We regularly assess our products and services to ensure that our efforts remain focused on core initiatives that align with our long-term strategy.”

Despite maintaining its status as the world’s largest centralized cryptocurrency exchange based on spot trading volume, Binance’s influence is reportedly diminishing. A recent report from cryptocurrency data provider CoinGecko highlighted a substantial 52.4% drop, amounting to $823.9 billion, in Binance’s trading volume between Q1 and Q2 of 2023. By comparison, the collective volume of the remaining top 10 exchanges experienced a $270.8 billion decline within the same period.

“Throughout Q2, Binance’s market share stayed under 60.0%, signaling a potential loss of its industry stronghold due to ongoing regulatory pressures,” noted CoinGecko’s report. In June 2023, the exchange's market share had dwindled to 51%, down from 61% in March.

Binance is grappling with increasing regulatory challenges. BAM Trading and BAM Management, the entities behind BinanceUS, filed for a protective court order against the U.S. Securities and Exchange Commission (SEC) on Monday. The SEC had previously sued Binance, its U.S. platform, and CEO Changpeng Zhao in June for alleged violations of securities laws.

In the court filing, BAM argued that the SEC's discovery requests for the company were excessive and unrelated to customer assets. They proposed limiting the depositions to four personnel, excluding the CEO and CFO from interviews, and narrowing the scope of questions that the SEC could ask during these sessions.