Delisted coins: traders nightmare
Delisting a coin or token means an exchange that initially supported specific crypto will be taking one or more coin/token from that particular exchange, thus the term delisting. This delisting is notified to clients by the exchange, giving them a certain period of time where they will have to retrieve their assets that are being taken off the platform.
We have received different notifications this year from exchanges delisting coins and tokens, giving clients a certain amount of time to withdraw these coins from the exchange. If you fail to retrieve your assets on time, you will be unable to have your crypto returned. This turns out to be a hassle for those who hold many altcoins on these exchanges, and they must go through the process of finding a wallet that supports all these delisted coins. Try not to leave this for a last-minute operation because unexpected things may happen, or you may forget the deadline. Forgetting a deadline means losing the coins you had stored on an exchange.
Besides going through the process of withdrawing your coins, this can also lead to people massively selling these coins because of the struggle of finding an exchange that supports it.
Although all crypto investors are advised not to store their coins on exchanges due to vulnerability on these centralized networks that can be hacked, many still store them on exchanges because it is easier to trade. For holders, it is easier; you buy, and you transfer your crypto to your wallet.
What about for those who trade? This means that they always have to have a certain amount of coins on their accounts unless you have a wallet that is linked to the exchanges you use. This is one of the reasons why Davincij15 began developing Pandora's Wallet, a wallet thought for traders where they can connect to an exchange and do a large amount of trading within the wallet.
There are various reasons behind this delisting of coins, such as regulatory uncertainty, low volume, liquidity, listing requirements, and security breaches.
Regarding regulatory uncertainty, countries are still being introduced to this revolutionary new digital market; thus, many haven't even gotten to the point of regulating it. The U.S is one of the pioneers when it comes to efforts in trying to regulate cryptocurrencies.
“Cryptocurrency exchanges based and licensed in the USA are internally required to adhere to said guidelines by ensuring that no security coins or tokens should be listed on their platform, to avoid regulatory scrutiny around securities regulations. The SEC-issued guidelines are not legally mandated or enforced, but cryptocurrency exchanges are not taking any chances, with several exchanges known to regularly delist coins and tokens that could be classified as security tokens.”
For example, most of Bittrex's delisting of coins where only for U.S customer's; this according to
U.S. Customers will not be able to buy or sell the above-listed Tokens/Coins. On the Change Date, our systems will automatically cancel all open (i.e, unexecuted) orders in the affected markets for U.S. Customers.
It may be challenging to know in advance what coins will be delisted, therefore being aware of exchange policies is a must if you are managing your currencies within an exchange.
Thanks for reading!
By: Carolina Pérez