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Binance has witnessed a significant plunge in trading volume associated with trading robots, which have been crucial in stabilizing liquidity.
What happened to #Binance?
— CoinGlass (@coinglass_com) May 28, 2024
Have all the robots gone on strike?@binance @_RichardTeng pic.twitter.com/2bSfiGxBbn
CoinGlass shows top digital tokens have lost up to 97% of their trading volume. Pepe dropped more than 97.5%, Dogwifhat 95.43%, while Solana lost 88.91%.
The substantial trading volume dips will likely create liquidity challenges.
While the reason behind the development remains unclear, the failure of bots that balance the market possibly contributed.
Traders use these robots for various functions, including liquidity provision, arbitrage, and market-making.
Thus, the market could see sudden declines in transaction volume if crucial bots go offline. Centralized exchanges use them to enhance the trading experience.
Trading bots may go offline due to different reasons, including platform maintenance, technical glitches, or policy changes.
Binance’s mounting legal challenges
The leading crypto exchanges face regulatory scrutiny again. The exchange allegedly sold creditor claims at half the price in the Gopax deal.
🔔 News Flash: South Korean crypto exchange Gopax, majority-owned by Binance, reportedly sold users’ deposit claims for half their value in August 2023.#Binance #Gopax #CryptoUpdates pic.twitter.com/3WmgcyenBy
— Crypto Updates (@Cryptoupdates__) May 28, 2024
Binance purchased a notable stake in Gopax as the South Korean crypto exchange’s Gopay suffered a financial crisis in 2023.
Gopay halted withdrawals during the incident, locking up approximately $51.5 million (70 billion won).
Binance promised to compensate the affected users and acquired Gopax shares at lowered prices. Nonetheless, rather than utilizing its funds, the exchange sold the affected users’ assets at a 50% discount.
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