This is huge news for the traders as this was the best way to play the market and maximize the profits; however, this was harder to understand for the casual trader. Binance shut off deposits and withdrawals for the assets on March 31 at 8 a.m. UTC, with a stoppage in trading at 10 a.m. on the same day. This information wasn’t deliberately showed to all users of the platform, and many have had no information about this happening.
“Due to a lack of understanding of how leveraged tokens work by many of our users. Binance has decided to delist all existing FTX leveraged tokens and corresponding trading pairs. The exchange officially announced on March 28.
What are FTX Tokens?
Recently, Binance announced its listing of two FTX leveraged ERC20 tokens, known as BNBBULL and BNBBEAR. Customers could trade these assets against USDT or BUSD, Binance’s stable coin. Each token represents a 3x leveraged long or short position in Binance Coin or whatever Bull or Bear coin you were trading.
This shows several coins like “BULL, BEAR, ETHBULL, ETHBEAR, EOSBULL, EOSBEAR, BNBBULL, BNBBEAR, XRPBULL and XRPBEAR.” From today aren’t available to trade anymore on the marketplace. There was an initial panic as users who had no idea what was going on with this change; we see their coins disappear from the balance and had a suspended written on there. Binance, however, said that if you failed to move your coins from the time of delisting. All your money would be traded to BUSD in the next 24 hours, so no reason to panic.
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 did not want to educate the traders and 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.