South Korean exchange Upbit has announced that it will suspend deposits for SNX, following a recent trade warning from the Digital Asset Exchange Alliance.
According to a recent notice from the crypto exchange, the Synthetix (SNX) token has been labeled a “trading caution item” by the Digital Asset Exchange Association or DAXA. As a result, the crypto exchange has decided to suspend deposits for SNX starting from April 24 at 15:00 KST.
Synthetix is a decentralized finance protocol built on Ethereum (ETH) that lets users create and trade synthetic assets, known as Synths, which mirror the value of other assets like currencies, commodities and stocks.
Shortly after the announcement was published, SNX fell nearly 5%. The token is currently trading at $0.69 with a market cap of $235 million.
The South Korean crypto exchange informed to users that it usually conducts a review of the assets marked under “trading caution item” to determine whether or not to terminate trading support.
“During the review process, the review period for designating a trading caution item may be extended, and if the reasons for designating a trading caution item are not completely resolved, the decision may be made to terminate trading support,” said Upbit.
In the case of SNX, Upbit explained that the reason why it ultimately decided to suspend deposits on SNX is the fact that Synthetix has failed to maintain the value of its stablecoin, sUSD, in according with the 1:1 ratio pegged to 1 USD.
So far, the Upbit notice will be valid until the fifth week of May 2025, in which a separate review may be conducted. If upon further inspection, the issues regarding SNX still persist, then Upbit may decide to terminate trading support altogether.
Although SNX and sUSD are two different assets, the announcement noted that SNX can be used as “collateral” for the the sUSD stablecoin.
At press time, the Synthetix issued stablecoin is currently up 9.4%. Unlike most stablecoins on the market which have maintained a fairly stable value equal to 1 USD, sUSD has gone up 12.7% in the past week and declined by 10.6% in the past month. It is currently trading hands at $0.86, still $0.14 shy of 1 USD.
On April 21, Synthetix founder Kain Warwick urged stakers to pitch in through its staking mechanism and help restore stability before more measures are implemented. The protocol introduced a new initiative called 420 Pool, which offered SNX holders a chance to SNX tokens by locking their sUSD for one year.
