Binance’s 7-day average spot BTC volume is 57 per cent lower since the beginning of September compared with roughly flat readings at a number of other exchanges

Bitcoin trading volumes on Binance have dipped this month as lawsuits and regulatory probe mount on the world’s biggest crypto exchange.

According to K33 Research, Binance’s 7-day average spot BTC volume is 57 per cent lower since the beginning of September compared with roughly flat readings at a number of other exchanges. Volumes at U.S.-based rival Coinbase are higher by 9 per cent over this period.

The dramatic drop comes as Binance is in the crosshairs of regulators around the world after a number of lawsuits, license refusals and voluntary withdrawals. Prosecutors at the U.S. Department of Justice (DOJ) are reportedly considering charges against the firm, while the Securities and Exchange Commission (SEC) three months ago sued Binance, the exchange’s U.S entity Binance.US and founder Changpeng Zhao, alleging the violation of several federal securities laws.

The ongoing DOJ and SEC cases vs. Binance may have deterred market makers from trading on Binance, explaining parts of the drop, K33 Research senior analyst Vetle Lunde said. Some market making has probably spilled over to other exchanges, but it is still almost certain that Binance’s problems negatively affect market volumes, Lunde said.

Binance changed on September 7 its zero-fee promotion for bitcoin trading with TrueUSD (TUSD) stablecoin, one of the most liquid trading pairs on the platform, which may have contributed to the drop.

Binance.US also suffered from a decline in trading activity. According to data from crypto analytics firm Kaiko, the weekly overall trading volume on that platform declined to $40 million from what was around $5 billion earlier this year, around 99 per cent decline.