Binance's Masterstroke: Zero-Fee Trading On TrueUSD After Record $1B Minting

Binance Holdings Ltd., the world's largest cryptocurrency exchange in terms of daily trading volume, has faced significant challenges and negative impacts as a result of legal actions initiated by the U.S. Securities and Exchange Commission (SEC). The company has been subjected to legal scrutiny and regulatory pressure, which has had a detrimental effect on its operations and reputation in the cryptocurrency industry.

Declining Market Share

The SEC's lawsuits and investigations against Binance have led to a decline in user confidence and increased regulatory uncertainty surrounding the platform. As a consequence, Binance has experienced a substantial decrease in trading volume, potential limitations on its services and an overall loss of market share in the cryptocurrency exchange landscape. The legal battles and ongoing regulatory scrutiny have presented formidable obstacles for Binance, shaping a turbulent period for the company.

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After the SEC filed 13 charges against Binance on June 5, the crypto exchange's shares fell more than 5% to hit its lowest level since March. Binance's cryptocurrency token, Binance coin, was down 9.7% intraday. According to data analytics firm Kaiko, Binance’s global market share fell by nearly 8% since last month, from 60% to 52%, because of the SEC shakedown. Its U.S. market share slumped to 0.9% as of June 26 from more than 22% recorded in April.

"The SEC lawsuits do pose an existential threat to all cryptocurrency exchanges that are operating in the United States," said Clara Medalie, Kaiko's research director. "If they're successful, then this will effectively shut down the vast majority of trading services for U.S.-based crypto investors."

French authorities also are investigating Binance for alleged "aggravated money laundering." Binance has also decided to withdraw from the Netherlands because of its inability to obtain a license and has applied to terminate its operations in the U.K. while canceling its registration with the securities regulator in Cyprus.

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TUSD Minting And Promotion

Binance has remained determined and persistent in the face of adversity. On June 21, the company announced its plans to extend its zero-fee trading promotion to include all trading pairs involving the U.S. dollar-backed stablecoin trueUSD (TUSD) starting June 30.

According to the announcement, traders would able to take advantage of zero maker fees for all TUSD spot and margin trading pairs from June 30, thereby extending the current promotion beyond the Bitcoin (BTC)-TUSD pair. Additionally, traders on the Binance platform should be able to exchange TUSD stablecoins without incurring additional fees during the promotional period. This decision follows Binance's recent minting of approximately $1 billion worth of TUSD on the Tron network, according to blockchain data released by Arkham Intelligence.

Throughout the promotional period, users will be able to benefit from zero maker and taker fees on both existing and new USD stablecoin spot and margin pairs, encompassing a wide range of tokens such as BUSD/USDT, TUSD/BUSD, TUSD/USDT, USDC/USDT, and USDP/USDT, among others.

Through this promotion, Binance plans to promote TUSD trading on its platform, which is the fifth-largest dollar-pegged stablecoin in the market issued by crypto firm Archblock, formerly known as TrustToken.

Binance's decision to promote TUSD trading stems from the New York state regulator's February mandate that the issuer Paxos Trust Co. cannot mint Binance-branded stablecoin BUSD. Following this regulatory crackdown, Binance began shifting its focus to U.S. dollar-pegged stablecoins and minted approximately $50 million worth of TUSD in February. According to data from Arkham, Binance’s crypto wallets currently hold at least 90% of TUSD's total market capitalization of $3.1 billion. Thanks to Binance's active minting, TUSD's total circulation has increased by more than 300% so far this year and is currently valued at over $3.1 billion.

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