TL;DR
- Upbit and Bithumb suspended SNX deposits following a DAXA warning over risks posed by sUSD’s instability.
- The drop of sUSD to $0.68 and SNX’s 26% plunge set off alarms on Upbit and Bithumb, triggering restrictions and warnings.
- The founder of Synthetix urged stakers to adopt a new system to contain the sUSD crisis and warned of harsher measures.
South Korea’s leading crypto exchanges, Upbit and Bithumb, suspended deposits of Synthetix (SNX) tokens after a warning issued by the Digital Asset Exchange Alliance (DAXA).
The organization, responsible for establishing security criteria for the country’s exchanges, added SNX to its cautionary asset list due to risks linked to the instability of sUSD, the stablecoin issued by the Synthetix protocol.
The stablecoin, backed by SNX itself, is facing serious difficulties maintaining its peg to the dollar. In early April, sUSD dropped to $0.83, and days later fell further to $0.68, marking its lowest level in five years. The crash dragged SNX down as well, with a 26% loss in a single month, setting off alarms among regulators and major market operators.
Upbit May Delist SNX if Conditions Don’t Improve
Upbit reported that it blocked SNX deposits and added a visible warning for users, highlighting the asset’s lack of concrete utility and its direct connection to the sUSD crisis. The platform also stated it will consider delisting SNX if market conditions fail to improve. Bithumb took a similar step and clarified it may reverse the measure if the issues are resolved.
Other platforms like Korbit and Coinone chose to place warning labels on their listings to alert investors, though without fully blocking trading with the token.
Synthetix Tries to Contain the Crisis with a New Staking System
In response to the crisis, Synthetix founder Kain Warwick publicly pressured SNX stakers to adopt a new staking system aimed at stabilizing sUSD. Warwick warned that stricter measures would be enforced if participation fails to reach the volume needed to slow the collapse.
Following these moves, sUSD posted a slight recovery, rising 3.7% to $0.87. However, it remains far from its original peg. For now, protocol leaders claim to have short- and medium-term plans to attempt to reverse the situation, though they have not disclosed further details about the strategies being developed.
