Decentralized exchanges (DEX) hit $133.1B in trading volume in March, reaching the highest monthly levels since May 2022.
The new figure also marked the third consecutive monthly increase in trading volume.
- The
rise in the volume was mainly triggered by the toughened regulatory
environment in the U.S. against centralized exchanges, including Kraken,
Coinbase, and Binance.
- In March, the U.S. Securities and Exchange Commission (SEC) served a Wells notice against Coinbase, citing the violation of securities laws through its exchange and staking services.
- One
month earlier, the SEC forced Kraken to halt the operations of its
staking service for U.S. customers and to pay a $30M fine to settle,
citing that the platform offered unregistered securities.
- Likewise, the U.S. Commodity Futures Trading Commission (CFTC) recently filed a lawsuit against Binance and its CEO Changpeng Zhao (CZ) with allegations of regulatory violations in seven counts.
- Binance,
the largest crypto exchange by trading volume, is also under scrutiny
by the Internal Revenue Service (IRS), the SEC, and federal prosecutors
in the U.S.
- Many
crypto investors reacted to these regulatory moves by shifting from
centralized exchanges to the DEXs, causing a jump in the latter's
trading volume.
- The
banking crisis, starting with the consecutive collapses of three
crypto-friendly banks within just a week in March, has also negatively
impacted the centralized exchanges' liquidity level by causing the USD
Coin (USDC) stablecoin to be de-pegged from the U.S. dollar (USD).
- Within
the first 24 hours of the CFTC's complaint against Binance, withdrawals
from the exchange jumped significantly, with nearly $1B in net
outflows.
- The
popular DEX Uniswap hinted at the rising trading volume in DEXs, with
its spot market volume recently surpassing $70B for the first time since
January 2022 and beating Coinbase for the second consecutive month.
