Binance Will Delist All FTX Leveraged Tokens, Why?
Binance, the world’s largest crypto exchange, has decided to delist all existing FTX leveraged tokens and corresponding trading pairs, and will stop trading at 2020/03/31 10:00 AM (UTC).
The assets being delisted include BULL, BEAR, ETHBULL, ETHBEAR, EOSBULL, EOSBEAR, BNBBULL, BNBBEAR, XRPBULL and XRPBEAR.
The trading pairs being delisted include BULL/USDT, BULL/BUSD, BEAR/USDT, BEAR/BUSD, ETHBULL/USDT, ETHBULL/BUSD, ETHBEAR/USDT, ETHBEAR/BUSD, EOSBULL/USDT, EOSBULL//BUSD, EOSBEAR/USDT, EOSBEAR/BUSD, BNBBULL/USDT, BNBBULL/BUSD, BNBBEAR/USDT, BNBBEAR/BUSD, XRPBULL/USDT, XRPBULL/BUSD, XRPBEAR/USDT and XRPBEAR/BUSD.
From now until the above delisting time, users will be able to either:
- Trade out of their existing Leveraged token positions.
- Withdraw their Leveraged tokens.
- Continue holding their Leveraged tokens until the trading pairs are delisted. We will credit your Binance account with the equivalent value held in each leveraged token at the time of delisting in BUSD and within 14 days.
Leveraged crypto tokens supplement the benefit of a futures contract and high leverage trading. It allows users to buy a leveraged version of a crypto asset, and when the price goes up or down, the return is amplified by 3x leverage.
For example, If the price of ETH rises from $120 to $132, it increased by 10 percent and the investor would net a 30 percent return in ETHBULL.
A leveraged ETH, which on Binance was called ETHBEAR and ETHBULL, multiplies the returns by three times. That means, if the price of ETH increased by 10 percent, the net loss or net gain from the trade would be multiplied by three times when trading the leveraged token.
Users respond with mixed reactions
The decision led to mixed reactions from users; some users angry about it.
i boguth BNBBULL at $530 while BNB was $16 but when BNB reaches $16 again, BNBBULL only will hit $120-130 which means you stole my $400. Binance has become center of fraud and modern theft. I want my $530 back 😡😡😡😡😡
— Takeshi Katsuro (@takeshikatsuro) March 28, 2020
Binance CEO Changpeng Zhao said that Binance will be delisting leveraged crypto tokens because many users still do not fully understand the tokens.
They are not designed for long term holding. They devalue over time when markets (underlying assets) fluctuate back and forth.
The main reason for delisting is that too many users don’t understand them.
— CZ Binance 🔶🔶🔶 (@cz_binance) March 28, 2020
Zhao emphasized that the leveraged crypto tokens brought significant volume to Binance and it would be “bad for business to delist them,” but the company made the decision to protect its users.
The delisting of leveraged tokens could directly translate to a higher daily volume on FTX, a cryptocurrency exchange invested by Binance that created the leveraged tokens.