Bitcoin (BTC) and other digital assets, including Tether (USDT), are currently experiencing an 8% discount on Binance.US due to liquidity issues resulting from a lawsuit filed by the U.S. Securities and Exchange Commission (SEC).
According to data from Binance.US, BTC is currently trading at $27,705.59, which is approximately $3,000 lower than its price on rival platforms like Coinbase, Kraken, BitStamp, and others. This discount is also evident for other digital assets such as Ethereum (ETH), USDT, and Solana (SOL), as per Coingecko data. Following the lawsuit filed by the SEC on June 5 against Binance.US, the exchange’s market depth has decreased by nearly 80% as market makers have exited the platform.
In the wake of these legal challenges, Binance.US discontinued accepting U.S. dollar deposits after its banking partners abruptly halted their payment channels. Consequently, the platform transitioned to a crypto-only model. Blockchain analytical firm Kaiko reported that this issue significantly impacted Binance.US’s reputation, causing its market share to fall below 1%. Subsequently, the exchange experienced high volatility with its USD pairs, with BTC reaching a peak of $138,000 on June 21. Prior to that, Bitcoin had traded at a 3% discount in May. Meanwhile, assets paired with stablecoins like USDT and USDC continue to trade at regular prices, according to Coingecko data.
Paolo Ardoino, Tether’s Chief Technical Officer (CTO), addressed concerns about the deviation of USDT from its dollar peg. He emphasized that the deviation is specific to Binance.US, where a general -8% spread seems to affect all cryptocurrencies on the platform. Ardoino explained that this situation arose due to the legal challenges faced by Binance.US, which has likely resulted in fewer market makers willing to engage in arbitrage at this time. 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 1 basis point above the dollar.”
The Tether CTO further clarified, “Tether is responsible for its primary market (http://tether.to). Market making in secondary markets (crypto exchanges) is the role of arbitrageurs and market-making professionals.”