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Starting from April 3, Binance exchange will stop supporting some leveraged tokens related to Bitcoin, Ethereum and BNB.
Binance will stop supporting multiple leveraged tokens
On February 19, Binance announced its intention to stop supporting leveraged tokens and Tether. The affected leveraged tokens include: BTCUP and BTCDOWN, ETHUP and ETHDOWN, BNBUP and BNBDOWN.
At 06:00 UTC on February 28, the cryptocurrency exchange will suspend the trading and subscription services of three pairs of leveraged tokens. All trading orders of the leveraged tokens mentioned by Binance will be “automatically deleted” on the specified date.
Therefore, users can only place orders after that. Before the specified deadline, Binance urged users to exchange their current leveraged tokens for alternative assets.
The exchange then announced that it will gradually delist the tokens and stop redemption from April 1 to April 3. According to Binance, users will have the opportunity to redeem their tokens before the delisting date.
However, if users redeem their tokens after the specified period, the exchange has stated that it will convert the tokens to USDT before the delisting date. Binance will transfer the tokens to the user’s account within twenty-four hours and withdraw the leveraged tokens from the user’s wallet.
The leveraged tokens issued by Binance are a derivative instrument that allows investors to leverage the underlying cryptocurrency assets. These tokens represent a collection of perpetual contract positions that are affected by the price fluctuations observed in the perpetual contract market.
Binance claims that leveraged tokens provide cryptocurrency traders with uncollateralized leveraged exposure. In addition, this eliminates the need for them to maintain margin levels and reduces the risk of liquidation.
Binance warns that trading leveraged tokens involves inherent risks, such as “price fluctuations, premiums and financing rates of the perpetual contract market”, despite the advantages.
Sentiment: Positive
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