Ever come across a screenshot of Binance delisting a coin and wondering why so?
You thinking was the coin scam?
Are the devs dead?
Are there fake coins now?
Were those coins risky investments??? 😱
Or did their devs have a squabble with Binance?
🏗️ Security Vulnerability: Now there are a couple of vulnerabilities that could arise around the listing of a coin. One of which could be the most popular reasons which is Hacks such as the 51% mining attack.When coins listed on exchanges experience hacks like that be it from internal(from within the team) or external sources, the exchange could seek to delist it as it poses a threat to the liquidity of investors that are heavily invested on the token using the exchange.
🛠️Maintenance Costs: Coins that have their own blockchains like layer 1 that get listed on exchanges such as coins like Sui usually have their own full nodes and would be capital intensive and time-consuming to maintain on the Exchange by the exchange programmers/devs.
So in order to maintain these type of coins on the blockchain there's would be some huge volumes been traded daily that would offset the costs associated with maintaining them. But if they're inadequate they would be have to be delisted.
📇Wash Trading: Wash Trading is an activity that's usually incited by owners of a particular coin or nft collections. It's a deceptive action done by the team to create fake trading volumes by buying up huge amounts of the coin,token or nft and then selling it off within a particular timeframe to trigger and convince unsuspecting investors to buy in or actively trade the coins or become holders. It's a usual occurrence in crypto but if exchanges come to find out about this activities being carried out,they might look to delist the coins/tokens as asides it being an illegitimate activity, it's also inauspicious for the future of the token.
🏗️ SEC Securities Regulations: Securities and Exchanges Commission aka SEC, is an agency created in the United States to provide investors protection on their assets from potential securities amongst the coins in the cryptocurrency space.
The SEC regulatory moves seeks to make all cryptocurrencies securities thus giving SEC the privilege of a purview on all cryptocurrencies thus making cryptocurrencies regulated.Now even though exchanges like binance have fought against it they also wish to keep their exchanges protected from the regulatory hands of the SEC As a result these exchanges would at any given time seek to delist cryptocurrencies that are being attacked by the SEC in order to protect their legal positions and not get attacked also by the SEC.
These are some of the common factors that can checked to measure if a token can be delisted on an exchange.
