• The BTC/USD pair was trading at a premium of $234 on Binance.US.
• The exchange’s market share dropped from 20% in April to below 5% as of 12 June.

The U.S. Securities and Exchange Commission’s (SEC) legal action against Binance [BNB] has created ripples across the broader crypto market. One of the biggest victims of the entire episode has been Binance.US, the American arm of the crypto behemoth.

According to digital assets data provider Kaiko, the exchange’s market depth has shrunk by more than 76% since the SEC lawsuit filed a week ago, driven by the large-scale exodus of jittery market makers and traders.

Liquidity crunch

Market depth is an exchange’s ability to absorb relatively large market orders without materially affecting the security’s price. Simply put, it is a measure of liquidity in the market.

After the SEC’s attempts at freezing Binance.US assets came to light, market makers, who provide the major chunk of liquidity, vacated swiftly over fears of their assets getting stuck on an exchange, much like the infamous FTX saga.

As liquidity dried up, Bitcoin [BTC] traded at a premium on the exchange when compared to other rival platforms. As per TradingView, the BTC/USD pair was trading at $26,316 on Binance.US at the time of publication, $234 more than the largest crypto exchange in the U.S., Coinbase.

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Author: Suzuki Shillsalot

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