Binance’s lifetime trading volume also surpassed $100 trillion. Despite the dominance of centralized exchanges like Binance, challenges persist in the industry. Kraken Australia is facing a $5.1 million fine for compliance breaches, and Coinbase’s FOIA lawsuit against the FDIC is creating regulatory tensions. Meanwhile, Crypto.com is expanding its footprint through strategic partnerships and acquisitions, including teaming up with Deutsche Bank for corporate banking in Asia-Pacific. It is also broadening its services to include more traditional financial offerings.
Binance Outpaces Rivals in User Deposits and Trading Volume
Binance, the leading crypto exchange, reported over $24 billion in user deposit inflows for 2024, according to data from DefiLlama. This figure is higher than the combined inflows of ten other exchanges.
In a blog post, Binance attributed this very impressive growth to a global surge in digital asset adoption that was fueled by regulatory advancements, historic price milestones, and the launch of spot Bitcoin exchange-traded funds in major markets like the U.S and Hong Kong. The exchange now boasts a user base of close to 250 million people worldwide.
Top exchanges by inflows in 2024 (Source: DeFiLlama)
According to DefiLlama, Bybit and OKX are the next largest exchanges in terms of inflows, with $8.2 billion and $5.3 billion, respectively. Other exchanges, like BitMEX, Robinhood, and HTX, recorded net inflows of $3.45 billion, $3.17 billion, and $2.12 billion.
On the other hand, platforms like Bitstamp, Bitfinex, and Crypto.com experienced outflows. Bitstamp saw $2.75 billion in withdrawals, followed by Bitfinex at $1.77 billion and Crypto.com at $358.1 million. DefiLlama did not include Coinbase and Gemini in its analysis because of the lack of wallet transparency, as these exchanges have not provided proof-of-reserves despite being publicly listed.
Institutional capital also surged across centralized exchanges, with the average Bitcoin deposit on Binance increasing from 0.36 BTC to 1.65 BTC in 2024. USDT deposits grew a lot as well, rising from $19,600 to $230,000, according to CryptoQuant. Binance also pointed out that it became the first centralized exchange to surpass $100 trillion in trading volume, with OKX trailing at $25 trillion in lifetime volume.
Top CEXs by lifetime trading volumes (Source: CCData)
Despite predictions that there might be a shift towards decentralized exchanges (DEXs) after the collapse of FTX in late 2022, centralized exchanges still dominate trading activity. In the past 24 hours, CEXs tracked by CoinGecko recorded $276 billion in trading volume compared to $28.5 billion on DEXs.
Kraken Australia Fined
Unfortunately, things are not going well for all exchanges. Australia's Federal Court recently fined Bit Trade, the Australian operator of the crypto exchange Kraken, 8 million Australian dollars ($5.1 million) after a case brought by the Australian Securities and Investments Commission (ASIC).
The judgment was delivered on Dec. 12 by Justice John Nicholas. He ordered Bit Trade to pay the fine in 60 days and also cover court costs. The court found the company guilty of failing to comply with design and distribution obligations and operating as a credit facility without the necessary license.
Although the penalty is quite high, it is still less than the $12.8 million that was asked for by ASIC, which the judge described as excessive. It did, however, exceed Bit Trade's proposed fine of $2.5 million.
ASIC’s case centered on Bit Trade's "margin extension" product, which allowed users to trade crypto and fiat with leverage without the legally mandated target market determination (TMD). ASIC Chair Joe Longo explained that TMDs are crucial when it comes to protecting investors from unsuitable products. Longo revealed that over 1,100 Australians used the margin extension, incurring $7 million in fees and interest while losing more than $5 million. One investor even lost almost $4 million.
Justice Nicholas criticized Bit Trade for prioritizing revenue over compliance, and pointed out that the company continued offering the margin extension to retail clients despite being fully aware of its legal obligations. Nicholas considers Bit Trade’s breaches of corporate law to be very serious, especially as the product was offered without considering local regulations until ASIC finally intervened.
Coinbase FOIA Lawsuit Pressures FDIC
A U.S. federal judge recently criticized the Federal Deposit Insurance Corporation (FDIC) for its extensive redactions in “pause letters” sent to banks regarding crypto-related activities. According to Coinbase Chief Legal Officer Paul Grewal, the criticism arose from a Freedom of Information Act (FOIA) lawsuit that was supported by Coinbase.
In a Dec. 12 order, Washington, DC, District Court Judge Ana Reyes stated that the FDIC appeared to lack a “good-faith effort” in its redactions, and called for more thoughtful revisions. Reyes also demanded that the agency refile the letters by Jan. 3. Additionally, the judge warned that the FDIC must be prepared to justify each redaction.
The pause letters were sent to 23 financial institutions, and urged them to halt or limit their crypto-related services. Grewal criticized the FDIC’s approach, and suggested that it supports the belief that the Biden administration is trying to restrict crypto’s access to financial services. This strategy is referred to as “Operation Chokepoint 2.0.” He accused the FDIC of using overly broad redactions, and questioned what the agency might be attempting to conceal.
This controversy happened amid broader discussions about potential regulatory changes. Reports suggest that Donald Trump’s advisors considered merging or eliminating agencies like the FDIC, as well as restructuring the Office of the Comptroller of the Currency and the Federal Reserve.
In preparation for these possible changes, Coinbase outlined plans to diversify its revenue streams. The exchange plans to shift towards stablecoin fees, staking rewards, and subscription services to reduce its dependence on market volatility.
Crypto.com Partners with Deutsche Bank
In other crypto exchange-related news, Crypto.com recently partnered with Deutsche Bank to provide corporate banking services across key Asia-Pacific markets, including Singapore, Australia, and Hong Kong. Deutsche Bank is known for offering fiat-to-crypto exchange and cross-border trading services to cryptocurrency firms, and hinted at expanding the partnership to the United Kingdom and Europe in the near future.
Crypto.com is based in Singapore, and has been actively growing its presence in the region. In November, it acquired Australian brokerage Fintek Securities, which allowed the exchange to offer traditional financial products through a regulated platform. In Hong Kong, Crypto.com is also listed as “deemed to be licensed” by the Securities and Futures Commission.
The Asia-Pacific region saw very strong cryptocurrency adoption in 2024. Singapore, Hong Kong, and the UAE ranked among global leaders. Singapore leads due to its advanced banking system, large investments, and comprehensive regulations for digital asset companies.
While traditional financial institutions are expanding into digital assets, Crypto.com is diversifying into traditional finance. Its roadmap for 2025 even includes offerings like stocks, derivatives trading, banking services, yield on cash balances, and credit card solutions. The company also recently acquired US-regulated broker-dealer Watchdog Capital to broaden its reach to include stocks and equity options for eligible traders in the United States.
Other exchanges in the region, like OKX, are also integrating traditional services. OKX recently launched fiat deposits and withdrawals in Singapore after its acquisition of a local payment institution license and appointing a former regulator as CEO of its subsidiary.
