South Korea’s two major crypto exchanges upbit and Bithumb have suspended the deposit service of the popular token Synthetix (SNX). This step was taken when the Virtual Asset Trade Alliance (DAXA) declared SNX a potential risk token. Investors are now being advised to take special precautions on SNX.
Daxa puts SNX in warning list
DAXA is a self-control body that sets standard for South Korea’s digital asset industry. Declaring SNX as “cautionary item” means that there will be a thorough review on the tokens whether it should be delisted or not. In such cases, exchanges usually show warning tags to investors and can stop trading, deposits or even withdrawal if needed.
Why did UPBit stop SNX’s deposit?
Upbit added a warning tag and deposit services with trading on SNX Token. According to the exchange, he had been keeping an eye on the D-Pag of Synthetix USD (SUSD) for a long time. Since SUSD is supported from SNX as collateral, this de-pinging can lead to voology in the value of SNX, which can cause damage to investors.
Upbit also said that SNX does not have enough use cases, which may cause its value to decline. He asked to take the final decision to deliver SNX or restore services after a detailed review.
Bithumb and other exchanges also showed a tough stand
Bithumb has also blocked the deposits for SNX Token and has put a warning tag on it. However, Bithumb said that this decision is not permanent and it can be changed according to internal conditions. If the condition of SNX improves, these restrictions can be lifted.
Apart from this, other Korean Exchanges like Korbit and Coinone have also issued a warning for this stablecoin and advised investors to be vigilant.
Susd’s de-pag increased concern
Stabilcin SUSD, who was associated with the SyntTix protocol, recently slipped from its peg of $ 1 and fell to $ 0.83 on 10 April. On 18 April it fell further to $ 0.68. The price of SNX has also seen a 26% decline in the last 30 days.
The SyntTix team has assured that they have short, mid and long-term solutions. Kain Warwick, the founder of the project, warned SNX stakes that if they do not participate in new staking mechanisms, they could be put on additional pressure.
However, after this warning, the price of SUSD was observed and it reached $ 0.87 by the time the news was written.
Conclusion
The increasing stress around SNX and its associated stablecline SUSD has caused the strictness of Korean Exchanges. This step of upbit and bithumb is to protect investors from potential risk. Until the utility and stability of SNX is not clear, it can remain monitored on it. Investors should do well research and understand risks before investing in SNX or SUSD.
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