Crypto exchange giant Binance's lead over rivals melted to its narrowest in four years as rivals grabbed market share, CCData said in a Thursday report.

Binance handled 36.6% of overall spot and derivatives trading volume on centralized crypto exchanges, the exchange's worst result since September 2020.

Its spot trading dropped by nearly 23% from August, driving its spot market share down to 27%, the lowest reading since January 2021, the report said. The platform's derivatives trading also declined 21%, representing a 40.7% market share among centralized exchanges, the lowest level since September 2020.

Binance representatives haven't returned a request for comment by publishing time.

One of the beneficiaries of Binance's decline was Crypto.com, which grew its spot and derivatives trading volume by more than 40% on a month-to-month basis, CCData pointed out. Year-to-date, the exchange booked the largest gain in spot trading, increasing its market share to 10.5%.

Overall, trading activity on crypto exchanges waned last month with derivatives and spot trading volumes both falling 17%, the report noted. September historically marks the end of a weak mid-year season in trading, giving way to a busier last quarter, CCData analysts said. "With catalysts such as increased market liquidity following the Federal Reserve’s interest rate cut and the upcoming U.S. election, trading activity on centralized exchanges is expected to rise in the coming months," the authors wrote.

Binance's waning dominance coincided with increasing regulatory pressure on the exchange.

Last month, the U.S. Securities and Exchange Commission (SEC) filed a proposed amended complaint against Binance, scrutinizing the exchange's token listing practice. It was a follow-up on the regulator's June 2023 lawsuit, which alleged Binance operated as an unregistered broker, clearinghouse and trading venue, and offered unregistered securities. The exchange agreed to pay a $4.3 billion fine to various U.S. regulators to settle those charges.

The company's founder and former CEO Changpeng "CZ" Zhao pleaded guilty and was sentenced to four months in prison for violating the Bank Secrecy Act (BSA) by failing to set up adequate know-your-customer (KYC) systems at the trading venue. He was released last week.