Upbit has announced it will halt deposits for Synthetix Network Token (SNX) after the token was flagged by the Digital Asset Exchange Association (DAXA) as a “trading caution item.”
The suspension is set to take effect on April 24 at 15:00 KST.
Synthetix is facing concerns regarding the stability of its stablecoin, sUSD, which has struggled to maintain its 1:1 peg to the US dollar. This issue is significant due to SNX’s role as collateral for minting sUSD. The Synthetix protocol, built on Ethereum, allows the creation and trading of synthetic assets. However, the instability of its stablecoin has led to regulatory scrutiny and price volatility.
Upbit stated that while SNX and sUSD are technically distinct assets, the fact that SNX underpins sUSD through its staking mechanism means any systemic issues with the stablecoin reflect on the broader Synthetix ecosystem. The platform emphasized that trading support reviews are ongoing and may extend beyond May, depending on whether Synthetix can resolve the stablecoin’s deviation from its peg.
Following the announcement, SNX experienced a drop of nearly 5%, trading around $0.69 with a market capitalization of $235 million.
Synthetix founder Kain Warwick recently urged the community to support the network by participating in a new staking initiative dubbed the “420 Pool.” This program incentivizes users to lock up their sUSD for one year in exchange for SNX rewards, in a bid to restore stability and confidence.
Upbit clarified that the current suspension only affects SNX deposits. However, a full review is underway, and if the underlying issues remain unresolved by late May, the exchange may consider delisting the token entirely.
Additionally, Synthetix acquired the leveraged token platform TLX in a token-for-token transaction in December 2024. According to the organization, this move is crucial for Synthetix to establish a decentralized liquidity layer and position itself as a leading product issuer in the DeFi ecosystem.
If you want to read more news articles like this, visit DeFi Planet and follow us on Twitter, LinkedIn, Facebook, Instagram, and CoinMarketCap Community.
“Take control of your crypto portfolio with MARKETS PRO, DeFi Planet’s suite of analytics tools.”
