The advantage of Binance is facing a new test. Europe’s major cryptocurrency regulatory framework has once again raised the old question: does Binance’s leadership come from its scale or from regulatory loopholes?

This pressure is happening immediately. The European Union (EU) is forcing Binance to withdraw from the region under the new Markets in Crypto-Assets (MiCA) rules. A few days earlier, Star Xu, CEO of OKX, shared its success in four parts, and each part also relied on these loopholes.

Binance has four competitive advantages

Both analysts and competitors acknowledge that Binance’s leadership rests on four pillars that Xu has just explained in detail, and each is genuinely a strength, but each is being tested even more heavily

Exploiting regulatory loopholes

Binance grew rapidly by operating in multiple countries, often staying ahead of local licensing requirements. That helped keep costs under control. The U.S. prosecutors also found that Binance never filed suspicious activity reports and allowed U.S. users to trade with the sanctioned Iran entity worth more than $898 million

In 2023, Binance agreed to pay $4.3 billion—a year in which the founder Changpeng Zhao admitted wrongdoing and stepped down

After that, Binance chased licenses abroad, or if it was pressured, it withdrew from the market instead—such as ending services in Canada and the Netherlands, and withdrawing its application in Germany earlier

Market-leading coin listing platform

Binance has shifted its focus to trading volume that outperforms competitors. CoinGecko’s report says that in 2025, Binance dominated the spot trading share among leading web exchanges at 39.2%, nearly five times higher than the next-closest competitor

Binance claims that throughout the year, it had a total trading volume of $34 trillion. The Launchpad platform and the continuous listing of new coins have encouraged traders to chase the next token, but critics warn that these hype cycles are intense and often leave retail investors taking losses

I miss 2020 Binance days.Everything on Launchpad and Launchpool used to FULL SEND.FDVs were $20M–$60M.20x on day one wasn’t luck. it was standard.Now?FDV $400M $1B.Non-stop dump.Retail = exit liquidity.This isn’t launch.This is liquidation.Bring back low FDV, real…

— Bull.BnB (@bull_bnb) May 31, 2025

Superior diversification

Binance has more than 300 million registered users by the end of 2025, according to the company’s report. Its partner network, volunteers Angels, and media partners also help extend access even further

Supporters call this building a strong community. However, analysts who disagree see it as narrative control while bad news is breaking

Binance is currently operating under crisis level PR mode to gain back the trust of users, but it might be too late 👇First, CZ told us small accounts are being paid by his competitors to fud him and Binance (just like SBF did before the bank run on FTX).But that didn’t work,… https://t.co/4brApBeqVD pic.twitter.com/rlDUvZQyXh

— Cowboy (@COWBS) February 3, 2026

High-level compliance investment

Spending on Binance’s compliance exceeded $200 million per year, up from $158 million two years earlier. Richard Teng, the CEO, told Bloomberg that in 2024 Binance received about 63,000 requests from law enforcement—up from 58,000 requests

Trust is earned through relentless action. I sat down with our CCO @NoahBPerlman to set the facts straight: hundreds of millions invested, 1,500+ experts working 24/7 to fight illicit activity. Compliance isn’t just a policy at Binance. It’s our unbreakable promise to users… pic.twitter.com/brZe6aDBDN

— Richard Teng (@_RichardTeng) February 26, 2026

However, the U.S. prosecutors also required that independent monitors oversee the company for three years in 2023, and critics—including Xu—have said that various controls have remained behind the market’s pace all along

Xu said, Let’s see how Binance plays the regulatory loophole game again… In the end, regulators will evaluate outcomes, not organizational charts, and his own platform competes directly with Binance

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Why strengths still remain

It’s hard to dispute Binance’s size because the platform traded as much as $7.3 trillion in spot in 2025, leaving other competitors far behind. It also maintained the No. 1 position throughout the changes—after CZ stepped down and Teng took over

In 2025, Binance did $7.3 trillion in spot trading volume. If we’re talking about perps volume, @binance did $27.2 trillion in volume last year. Absolute domination. pic.twitter.com/Drz11KFGXa

— BitBull (@AkaBull_) January 2, 2026

Binance says its proof-of-reserves system currently supports users’ assets of about $163 billion

A user base spanning all of Asia, the Middle East, and Latin America, with influence extending far beyond Europe

Nevertheless, EU pressure is real. Binance is gradually shutting down services in the European Union next week, and the company pulled out of efforts in Greece just a few days ago

Gilliam Lynch, Binance’s head for Europe and the UK, told Reuters that Binance has not exited Europe

Competitors are taking over in place of Kraken—Kraken has cleared Ireland already—and Coinbase has chosen a hub in Luxembourg, ready to serve users that Binance leaves behind

Paul Barron, the analyst, doesn’t seem worried. He calls this deadline a consolidation that the market has already priced in, and for the most part, it clears inactive platforms

🔥Do 90% of EU crypto platforms die on July 1st due to MICA enforcement? – FACT OR FICTIONThat 90% counts entities, not volume. Most are dead shell registrations that never had real users (Estonia: 641 VASPs → 40).~70% of EU crypto volume already runs through licensed venues.… pic.twitter.com/fLaB8U8hWP

— PaulBarron (@paulbarron) June 24, 2026

The open question is whether Binance’s advantages come from the scale of its business or regulatory loopholes. Clearer rules should help answer that