Binance has announced that it will be removing all leveraged tokens from its platform. Users have until March 31 to get their funds off Binance.
In a surprise move, Binance is delisting all of FTX Exchange’s leveraged tokens. The announcement was made through Binance’s official channels recently.
Many Tokens Delisted
The announcement to delist FTX Exchange’s leveraged tokens came as a shock to many in the cryptocurrency community. The delisting, set to be complete on March 31, means that all leveraged tokens must be withdrawn or they will be converted to Binance’s stablecoin BUSD relative to their USD worth at the time.
#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
Some of the assets to be completely delisted from Binance include BULL, ETHBULL, ETHBEAR. EOSBULL, EOSBEAR, BNBBULL, BNBBEAR, XRPBULL, and XRPBEAR, as per the announcement. Each BULL and BEAR token represents a leveraged position for their respective cryptocurrency. For example, if Ethereum rises 1%, ETHBULL will increase by 3%. The same applies in reverse for ETHBEAR.
According to Binance’s CEO Changpeng Zhao (CZ), leveraged tokens are far too dangerous for users. They tend to “devalue over time,” according to him, and are not meant for long-term holding. CZ claims that people don’t read the notices and, because they are among the most actively traded tokens, it is far too risky.
Re: Leveraged Tokens delisting. While these tokens rarely cause you to be liquidated, they will devalue over time as markets fluctuate up and down. They are not meant for long term holding. If you have an unrealized loss, holding for a come back is unlikely to work. 1/3
— CZ Binance (@cz_binance) March 28, 2020
Anger Quickly Boils Over
However, many did not accept CZ’s justification. According to the CEO of FX Exchange, Binance delisted the tokens due to being uninterested in educating people about them. Many are claiming that Binance simply saw FTX Exchange as a competitor and decided to cut the relationship.
1) Binance de-listing LTs; didn't want to manage user education/support
2) FTX listing LT USDT pairs to compensate
3) You can either send LTs to FTX wallet or they'll turn into BUSD on Binance
More LT info: https://t.co/6HiWhiccP7
— SBF (@SBF_Alameda) March 28, 2020
As a result of the mega-crash that happened two weeks ago, many leveraged token holders suffered a massive loss. However, Binance seems to have no issue with its own margin trading platform, which is equally as volatile, providing users with 100x leverage. The bottom line seems to be that Binance could not make money off FTX tokens, so they were delisted.
As a result of the anger boiling over on Twitter, many have proceeded to tweet #thiefCZ. Listing and delisting so many tokens in such a short time frame, they claim, is tantamount to fraud.
As of now, it seems that leveraged tokens will never be re-added to Binance despite the outcry. Instead, FTX Exchange will simply have to compete directly with Binance now.