- Rivals OKX and Bybit have also suspended deposits and withdrawals for the Solana-based stablecoins.
- USDC issuer Circle has decried the move by the exchanges.
- SOL dropped 4% in the past 24 hours.
Cryptocurrency exchange Binance halted USDC and USDT deposits on the Solana blockchain ‘until further notice’ before resuming USDT (SOL) hours later. Although the exchange did not come out clear, the reason behind the delisting could be due to the recent FTX implosion. FTX’s former CEO, Sam Bankman-Fried, was one of the earliest investors in the top “Ethereum killer.”
Following the collapse of the Bahamian-based exchange, the SOL token was significantly affected. Before the announcement by Binance that it was liquidating its FTT holding triggered the exchange’s debacle, SOL was changing hands for $37. The crypto has plunged 64% to $13 – representing a decline of 4% in the last day.
Solana has also registered a significant loss in its total value locked – the value of digital assets locked in a Defi protocol. According to TVL aggregator, DefiLlama, the value has tanked by a whopping 96% from a high of $9.8 billion. Other exchanges have also announced delisting of Solana-based stablecoin, dealing a blow to the two-year-old blockchain.
OKX pulled out the stablecoin pairs at 3 am UTC on November 17. The Seychelles-based cryptocurrency exchange noted that transactions on the stablecoins remain operational on other networks. Early this month, Bybit suspended the blockchain’s leveraged pairs, turning them into USDT as a precautionary measure.
Solana’s current supply of USDC is at 5,034,954,059, while that of USDT is at 1,889,999,963, according to Solana Explorer.
Circle has reassured users, faulting the exchanges for the ‘disappointing’ step
The global issuer of USDC and Euro Coin Circle has faulted the move by the exchanges. In a Tweet, the fintech company said: “USDC on Solana is operating as expected, and there are no issues with issuing or redeeming USDC. USDC is always redeemable 1:1 for US dollars.”
Circle’s CEO, Jeremy Allaire, retweeted the comments, adding that it was “not clear what the motivations are for the exchange actions, which are disappointing.”
In September, Binance announced BUSD auto-conversion for stablecoins (USDC Coin, Pax Dollar, and TrueUSD). The exchange added that clients could use the feature to convert their existing balances and new deposits at a 1:1 ratio.