Binance Says Leveraged FTX Removal Comes After Confused Users Hodled Tokens
Binance explains that the removal of FTX leveraged token was the result of users holding tokens instead of trading them.
Binance blamed customer confusion for its FTX leveraged token delisting, explaining that users held the tokens instead of trading them, which was the originally intended use case.
“The leveraged tokens are not designed for long term holding, which is what we noticed users were doing,” a Binance representative told Cointelegraph in an email. “The tokens will devalue over time as prices go up and down.”
The exchange rep said Binance currently has no plans for explaining and relisting the removed products.
Binance announced the removal on March 28, which will take effect on March 31
Binance announced plans for FTX leveraged token removal in a March 28 announcement, just weeks after launching the products. The exchange cited users did not understand the products, leading the removal.
“The tokens are designed for short-term trades,” the Binance representative explained to Cointelegraph. “If users hold BULL tokens when prices are continuously going up, then the BULLl tokens will outperform 3X long BTC,” the rep said. “If users hold the tokens when prices are fluctuating (as most crypto assets do), then the tokens will underperform 3X long BTC.”
The products followed a 2019 investment in FTX
Binance unveiled an equity investment in derivatives exchange FTX in December 2019. The exchange also bought a long-term stake in the derivatives platform’s native FTX token.
“Binance and FTX will work together to offer better trading products and platforms for the traders, grow the market and further develop the cryptocurrency ecosystem,” the Binance rep explained regarding Binance’s rationale behind the deal.
The representative pointed out FTX’s rapid growth and popularity. Referencing the outfits trading products and over-the-counter trading, the representative added:
“As part of the strategic partnership, FTX will help build out the liquidity and institutional product offerings across the Binance ecosystem, including Binance Exchange (Binance.com) and the Binance over-the-counter (OTC) trading desk.”
Additionally, Binance and FTX plan to collaboratively build an array of products.
Binance has seen many headlines in recent weeks as the massive operation continues expansion. Just yesterday, Binance Academy started up a China-based blockchain accelerator.
