@cashburns
Negative KYC/AML press coverage often erodes user trust in exchanges, leading to gradual market share loss. In the short term, exchange token prices fall as custodial risk premiums rise. Over weeks, declining net deposits and reduced trading volumes confirm the trend. Outflow of assets depresses liquidity, widening spreads and causing spillovers into related pairs. Measuring exchange’s custody market share alongside spot depth provides forward indicators. Typically, market share erosion manifests over 1–3 months, with token price underperformance reflecting sustained confidence loss.
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