Decentralized Exchanges Witness Massive Surge in Trading Volumes Amidst Regulatory Actions

Decentralized Exchanges Witness Massive Surge in Trading Volumes Amidst Regulatory Actions

Over the past two days, decentralized exchanges (DEX) have experienced a significant surge in total daily trading volumes, reaching nearly $800 million. This surge comes in the wake of recent legal actions taken by the United States securities regulator against major cryptocurrency exchanges Coinbase and Binance, causing crypto investors to react.

According to aggregated data from CoinGecko, the median trading volume across the top three decentralized exchanges, namely Uniswap v3 (Ethereum), Uniswap v3 (Arbitrum), and PancakeSwap v3 (BSC), has seen a staggering 444% increase in the past 48 hours. These three exchanges account for 53% of the total DEX trading volume in the last 24 hours and have witnessed a combined growth of over $792 million between June 5 and June 7.

Furthermore, the trading volume on Curve, a DEX that specializes in the trading of stablecoins, has experienced a remarkable spike of 328%. Currently, the majority of trading activity on Curve revolves around U.S. dollar-pegged stablecoins such as USD Coin and Tether.

During the memecoin frenzy in May, trading volumes on DEXs briefly surpassed those of Coinbase. Crypto investors rushed to purchase tokens like Pepe (PEPE) and Turbo (TURBO) through Uniswap and other decentralized protocols, as these memecoins were not listed on major centralized exchanges.

As DEX volumes soared, Binance witnessed significant net outflows, with the value of assets exiting the exchange surpassing $778 million. It’s important to note that these net outflows are still considerably lower than the exchange’s total reserve. At the time of writing, Binance maintained a stablecoin balance exceeding $8 billion.

These market dynamics unfold amidst a series of legal actions by the Securities and Exchange Commission (SEC) against crypto exchanges. On June 6, the SEC sued Coinbase, alleging the exchange offered unregistered securities and acted as an unregistered securities broker, among other charges. A day prior, on June 5, the SEC filed similar allegations against Binance, Binance.US, and Binance CEO Changpeng Zhao (CZ). The SEC accused Binance of failing to register as a securities exchange, thus engaging in illegal operations in the U.S. Changpeng Zhao was sued as a “controlling person” according to the charges.