What Happens to Cryptocurrencies When They Are Delisted?
There are thousands of cryptocurrencies out there, but if you’ve been following this blog for a while, you know that they aren’t all winners. Unfortunately, coins are frequently found to be scams or banned by governments and, as a result, are delisted.
But what does delisted mean? And what happens to cryptocurrency that’s been delisted? We will cover all that and more in this article, so keep reading.
What Does it Mean When a Cryptocurrency is Delisted?
Sadly, although there are many wonderful cryptocurrencies out there in the world, there are also several scam coins. These scam coins don’t go undetected for forever, and at some point, buyers will report them to various government bodies or expose them as scams.
When this happens, it might be second nature to assume that the coin would disappear, but blockchain doesn’t work that way. Instead, when a coin is found to be a scam, it often continues to exist, but governments and exchanges don’t want individuals to continue buying them, so, as a result, they ask that they be delisted, or removed off of exchange sites, so it’s hard for people to accidentally be deceived into buying a coin.
So, just to be abundantly clear, delisted coins still exist, they just are no longer listed on exchanges for sale. Additionally, it will be very hard to buy and sell the token going forward, unless you have a friend with the crypto—but that’s a story for another time.
Related: Hex Cryptocurrency: The Ultimate Scam
What Happens When a Token is Delisted?
When a token is delisted, it is removed from several exchanges. Before this happens, a notice will likely be posted on the exchange, warning users to sell their coins before the cryptocurrency is delisted.
These warnings are typically only posted 2-3 days before the delisting occurs, as such, many traders end up stuck with tokens they are unable to exchange. In most cases, contacting customer service will resolve the issue, and they can direct you on how to sell the tokens when it is no longer listed on the platform.
Interestingly enough, however, there are still people holding several delisted tokens months after the fact. As such, Binance, a popular trading platform, has taken a new approach, and that is that it will now convert any remaining delisted currency balances in accounts into USDC. This will allow individuals to have a token they are once again able to trade and sell.
What Tokens Will Binance Convert to USDC?
On September 2nd, 2024, Binance will convert any remaining balances in the following cryptocurrencies into USDC:
· Bitcoin Standard Hashrate Token (BTCST)
· Bitshares (BTS)
· Groestlecoin (GRS)
· Hegic (HEGIC)
· Mobilecoin (MOB)
· Monetha (MTH)
· Multichain (MULTI)
· Navcoin (NAV)
· Sologenic (SOLO)
· Symbol (XYM)
· Tribe (TRIBE)
So, if you currently hold any of these in your Binance account, if you don’t transfer them to another wallet before September 2nd, they will be converted to USDC.
Are Delisted Cryptocurrencies Bad?
It’s important to note that while a cryptocurrency being delisted is never a good sign, it isn’t necessarily a bad sign either. Sometimes, cryptocurrencies are just delisted due to local government regulations, inactivity, or because a token is under a government investigation. While the token may still be considered legal when the investigation is done, platforms don’t want news articles causing panic sales—so they’ll delist the token for now.
For these reasons, we don’t recommend buying a delisted token, but if you do your research and are still interested in buying the token, you can probably find it on a DeFi exchange. Additionally, in some cases, even though a token is delisted, it may be relisted later, so some coins are worth holding on to.
That being said, if you are holding onto one of the aforementioned cryptocurrencies(other than Monero), it's probably time to let them go, as Binance converting them is a sign that the end of popularity may be near.
Related: Ripple’s Battle With the SEC Rages On
What if You Don’t Want Binance to Convert Your Crypto?
If you don’t want your delisted tokens auto-converted, then you must withdraw them by September 1. After September 2nd, you will not be able to withdraw these tokens, and you will be unable to undo the conversion performed by Binance. You will see a USDC balance instead of whatever tokens you previously held as soon as the auto conversion is complete.
What Rate Will Binance Use to Convert Delisted Currencies?
Binance announced on August 12th, 2024 that they would use an average exchange rate for converting the delisted currencies to USDC. This average would be taken for the conversion rate of the delisted currency to USDC between September 2nd, 2024, and March 1st, 2025. The conversion will be done in parts so as not to overload the markets of any particular delisted cryptocurrency. The conversion will be finished on March 1st, 2025, for all Binance wallets.
What Happens After Delisted Tokens Are Converted?
After the conversion is complete, you will be able to sell or trade any USDC you received during the conversion. It’s important to note that the conversion is being done in several stages, so your cryptocurrency may not be accessible for up to 6 months. If this does not work for you, then ensure you remove your delisted tokens from your Binance wallet over the course of the next two weeks before the conversion begins.
Overall, it's nice that Binance is doing something with customer balances that are left of delisted cryptocurrencies. However, there isn’t much time to act if you don’t want yours to be converted. If that’s you, ensure you log into your Binance wallet today to move your cryptocurrency elsewhere because if you wait until after September 1st, 2024, it will be too late, and you will find yourself with a USDC balance instead. Regardless, once the conversion is done in March 2025, at least you will have some USDC to trade and spend!
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