Crypto Exchanges Enter US Stock Trading Amid Bear Market, Facing High Compliance Costs and Competition from Legacy Brokers

Amid the prolonged crypto bear market, major exchanges including Binance and Coinbase are venturing into US equity trading, aiming to evolve from single-asset platforms to full-stack financial hubs. Yet this strategic pivot faces a host of obstacles. US stock markets are heavily regulated, demanding costly compliance infrastructure. Commissions are already near zero, eroding a key selling point for crypto exchanges. Furthermore, the user bases overlap only partially — crypto traders are not necessarily stock investors, and switching costs are high. In contrast, legacy brokers like Charles Schwab, Interactive Brokers, and Robinhood have long abandoned trading commissions as a primary revenue source. They now generate profits through asset custody, cash sweep programs, margin lending, and interest income on client balances. This asset-retention model creates a virtuous cycle: the more assets a broker holds, the more revenue it earns from spreads and interest, regardless of trading activity. Crypto exchanges entering this space must not only build regulatory and operational muscle but also convince users to park their savings, not just execute trades. The competition is no longer about transaction volume but about who can keep users' assets longest — a game traditional brokers already dominate.