Numerous major exchanges are disabling deposits and/or withdrawals for Solana-based variants of the top two stablecoins, USDT and USDC.

The wave of delistings follows Solana’s major price crash in the wake of FTX’s collapse – an exchange known to be closely involved with the network and token. 

Scrubbing the Solana Stablecoins

On Thursday, Binance announced that deposits for Solana-based USDC and USDT tokens had been “temporarily suspended until further notice,” without providing any explanation. It later resumed processing deposits for USDT “after internal assessment and review,” without any further updates about USDC at writing time. 

“Binance reserves the right in its sole discretion to amend or change or cancel this announcement at any time and for any reasons without prior notice,” it added. 

Similarly, OKX revealed late Wednesday that it would entirely delist these tokens starting at 3:00 AM UTC on Nov. 17. That includes suspension of both deposits and withdrawals for both tokens on Solana. 

Bybit also halted deposits and withdrawals for USDC and USDT on Thursday, while BitMEX paused USDT deposits at 13:20 UTC. 

On-chain data indicates that the supply of USDC circulating on Solana is over twice as large as that of USDT on the network, despite USDT having a larger market cap overall. It accounts for about $5 billion in USDC, which is 11% of its total market cap. Meanwhile, Solana hosts roughly $1.9 billion in USDT, which are worth 1.3% of the token’s total worth. 

What’s the Issue?

Exchanges provided little explanation for their delistings, leaving Twitter to speculate on their motivations. 

Some believe they may be related to FTX’s collapse, from which contagion has already spread to other major industry players like BlockFi and Genesis. 

FTX’s former CEO Sam Bankman-Fried was a major Solana proponent. In the wake of his exchange’s collapse, SOL has fallen over 50% in value, taking it well under crypto’s largest assets by market cap.

Wrapped Bitcoin circulating on Solana has also lost its peg to Bitcoin and collapsed by over 90% since the institutions providing reserves for these tokens were FTX and Alameda.

However, USDT and USDC on the network are directly issued by Tether and Circle, which have not reported similar financial issues. Circle clarified that USDC on Solana remains fully redeemable and backed 1:1. 

On Twitter, Tether CTO Paolo Ardoino offered his own theory about why the stablecoins are suddenly being delisted:

“Just speculating, but could be that exchanges are seeing too much connection between FTX and Alameda and Solana,” he said. “There is a lot of tension.”

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