Despite the backlash, Binance is moving ahead with FTX leveraged token delisting. The largest cryptocurrency exchange, Binance, has announced that it will delist all the leveraged tokens to prevent further damage from COVID-19 related market turmoil. Users currently undertaking trades using leveraged tokens will have to close their positions by March 31.
#Binance Will Delist All FTX Leveraged Tokens
From now until the delisting time you can:
– Trade out existing positions.
– Continue holding and be credited the equivalent value of your holdings in BUSD at the time of delisting.
— Binance (@binance) March 28, 2020
Binance states that financial markets are under immense stress due to the current pandemic concern. Extreme volatility can prove damaging to many traders who are new to leveraged trading tools. The FTX leveraged token delisting decision is a preventive measure. However, there are also claims that FTX leveraged tokens aren’t generating enough profits for the crypto exchange, and hence it is using the COVID-19 induced turmoil as an excuse to phase out the FTX exchange’s products.
FTX leveraged token delisting will help traders amidst COVID-19 turmoil
Binance made the surprise announcement that on March 31, all the leveraged tokens will be delisted from the platform. Traders must square off their positions before the due date to prevent any untoward losses and receive their funds.
Binance’s official channels made the announcement about multiple tokens being delisted in the wake of extreme market volatility. All tokens must be withdrawn by the trader themselves by March 31, or they will be converted into equivalent BUSD as per the price on March 31. Crypto community expressed shock in response to the news as many traders view such volatility as a trading opportunity.
Some important assets which will not be available post-March 31 include BNBBEAR, EOSBULL, BULL, ETHBEAR, XRPBEAr, and many more. Most of these tokens are in Bull-Bear pairs and represent a healthy chunk of trading on the platform. Binance chief executive officer Zhangpeng Zhao states that leveraged tokens represent considerable risk to the traders as they lose value quickly amid volatility and have no long-term value. These tokens constitute a significant portion of the trading volume and thus must be regulated well.
The crypto community reacted with harsh criticism of the delisting decision. Most are not convinced about the justification given by Binance. Some argued that Binance does not want to educate the traders and simply chose an easy way out. There were claims that Binance is threatened by the potential profits that FTX exchange can generate from the leveraged token trading.
Also, many believe that such quick delisting is akin to fraud. Traders must be given more time to close their positions.