Binance announced today that it will be delisting CLOAK, MOD, SALT, SUB, and WINGS from its trading platform, citing reasons ranging from “commitment of the team to project” to “fraudulent conduct.” The move comes after the exchange’s removal of BCN, CHAT, ICN, and TRIG last October, and may indicate a broader industry trend.
Binance Delisting Projects
According to Binance, the exchange routinely conducts periodic reviews of all listed assets. Specifically, the exchange makes potential delisting decisions based on the following criteria:
- Commitment of the team to project
- Level and quality of development activity
- Network and smart contract stability
- Level of public communication
- Responsiveness to Binance’s periodic due diligence requests
- Evidence of unethical or fraudulent conduct
- Contribution to a healthy and sustainable crypto ecosystem
While Binance did not make specific comments about which of the above criteria were unmet for each token, recent news could suggest some of the underlying reasoning for the delistings.
SALT Lending, the issuer of SALT token, was subpoenaed by the United States Securities and Exchange Commission last November. The SEC cited the legality of the platform’s $50 million token sale, according to the Wall Street Journal.
Substratum, a US-based project working on building a “decentralized web,” recently faced removal of its SUB token from the popular Exodus wallet due to “errors” relating to the token’s recent “smart contract migration.” Substratum has also missed several key milestones for its SubstratumNode software despite promises that it would be ready for release by the end of 2018.
Impact of Delisting
The gravity of a Binance delisting cannot be understated. The majority of trading activity for CLOAK, MOD, SALT, SUB, and WINGS takes place on Binance. Following the delisting, these projects will lose their primary source for trading volume, with Binance previously accounting for 50-95 percent of trading volumes for these tokens.
The market has also taken notice of the delistings. The five to-be-delisted tokens responded with a 12 to 32 percent drop against BTC the last 48 hours. Traders and investors of CLOAK, MOD, SALT, SUB, and WINGS should note that trading will cease on Feb 22, 2019, at 10:00 AM UTC, while withdrawals will continue until May 22, 2019, 10:00 AM UTC.
This trend of token delistings is not a new phenomenon. In December 2018, Huobi placed 32 tokens into an “ST” (special treatment) category, citing “insufficient trading volume” and “investment risks to users.” Among the 32 ST tokens were SALT and SUB–two tokens from Binance’s delisting announcement.
In the same month, Kucoin placed MOD into its ST category and followed the action by delisting SUB in January of 2019.
It appears that an industry-wide trend of delisting tokens with low trading volumes, questionable legality, and poor development progress is unfolding. It will be interesting to see how these major delistings will affect the behavior of these projects, and crypto projects in general, over the coming months.Posted In: Altcoins, Binance, Crypto Exchanges