- Bitcoin is trading at an 8% discount on Binance.US due to liquidity issues caused by a lawsuit filed by the SEC.
- Binance.US market depth has fallen by almost 80% as market makers exited the platform after the legal troubles.
- Tether CTO stated that the deviation from the dollar peg is exclusive to Binance.US and is caused by the legal challenges the exchange is facing.
Bitcoin (BTC) and some other digital assets, including Tether (USDT), are currently trading at an 8% discount on Binance.US, owing to liquidity issues on the platform as a result of a lawsuit filed by the United States Securities and Exchange Commission (SEC).
According to data from Binance.US, BTC is currently trading at $27,705.59, approximately $3000 less than it sells on rival platforms such as Coinbase, Kraken, BitStamp, and others.
Binance’s problems in the United States
Since the SEC filed a lawsuit against Binance.US on June 5, the exchange’sexchange’s market depth has dropped by nearly 80% as market makers exited the platform.
Following the legal issues, the exchange stopped accepting U.S. dollar deposits after its banking partners abruptly stopped accepting payments and transitioned to a crypto-only platform. According to blockchain analytics firm Kaiko, this issue severely harmed ‘Binance. U.S.’ reputation and its market share fell to less than 1%.
Meanwhile, assets paired with stablecoins such as USDT and USDC are trading at normal prices, according to Coingecko data.
Tether CTO addresses Current USDT trading on Binance.US
Paolo Ardoino, Tether’s CTO, addressed concerns that USDT had deviated from its dollar peg. He emphasized that the deviation is unique to Binance.U.S., a general -8% spread appears to apply to all cryptocurrencies on the platform.
According to Ardoino, the situation was caused by the ongoing legal challenges faced by Binance. U.S. He stated, “Binance.US is going through some legal challenges, so it probably doesn’t have many market makers willing to arbitrage at this moment in time. On Binance.com, USDT is trading 1bps above the dollar.”
The CTO further stated that “Tether is in charge of its primary market (http://tether.to). Market making secondary markets (crypto exchanges) is the role of arbitrageurs and market marketing professionals.”