The delisting of certain cryptocurrencies is a phenomenon that is far more common than what people might expect. For every successful crypto coin, there are many that fail, which results in its delisting from exchanges. But the failure of a project and its coin isn’t necessarily the only reason for delisting a cryptocurrency.
In this post, we will find out the delisting meaning in the world of cryptocurrencies, how the process works, and what are the reasons that would result in this negative outlook.
Delisting Meaning
A coin/token listing is when a cryptocurrency is listed on an exchange. Coin listings can happen on different types of exchanges, but usually, the process is the same. Whereas on the flip side, delisting is the process of removing an existing cryptocurrency (coin or token) or a trading pair from a crypto exchange.
Delisting can happen willingly at the request of the project that manages the cryptocurrency for a variety of reasons, including project discontinuance. Alternatively, a more prevalent reason for delisting (involuntarily) is that the coin no longer meets the exchange's different listing standards.
How Does Delisting Work?
When an asset gets delisted from an exchange, all of its trading pairs are removed. The asset can still potentially be traded on other exchanges (such as decentralized exchanges), or through over the counter trading (OTC), but trading activity on the exchange that delisted that asset will cease.
After the trading pairs associated with the delisted asset are removed, the assets withdrawals from the exchange will remain open for a specified period of time after the delisting. This way, users have the option to withdraw their existing funds kept on the exchange even though trading is no longer available on the platform.
What Are The Reasons For Delisting?
There are numerous factors that could go into the decision for an exchange to delist an asset. While non-exhaustive, some of these factors include the following:
- Overall team commitment to the project
- Quality and level of development activity
- Project network and/or smart contract stability
- Level of public communication from the project team
- Responsiveness to due diligence requests from an exchange
- Evidence of unETHical or fraudulent behavior
- WhETHer the project is contributing to a healthy, sustainable blockchain and cryptocurrency ecosystem
- Other reasons, for which the exchange deems conducting business with the project unacceptable or risky
What Are Examples Of Delisted Crypto In The Past?
Since the inception of Bitcoin, countless cryptocurrencies have been delisted from exchanges because they failed to meet the necessary conditions. Some of these are:
- AirSwap (AST)
- Aventus (AVT)
- Contentbox (BOX)
- Cindicator (CND)
- Cortex (CTXC)
- DragonChain (DRGN)
- DATA (DTA)
- Dragon Token (DTX)
- DAOstack (GEN)
- Hydro Protocol (HOT)
- IOS (IOST)
- MATRIX (MAN)
- MobileGO (MGO)
- MedicalChain (MTN)
- Nucleus Vision (NCASH)
Why Are Questionable Crypto Still Listed?
It is widely known today that the meme cryptocurrencies, Dogecoin (DOGE) and Shiba Inu token (SHIB) are listed on almost all of the biggest cryptocurrency exchanges despite having been created as a joke. So what is the reason for this?
The biggest probable reason why these questionable cryptocurrencies are able to remain on exchanges is almost certainly due to their high demand that increases the trading volume of the exchange. Due to their high trading volume, such cryptocurrencies are allowed to trade on well-known exchanges despite having almost zero utility.
Closing Thoughts
Having understood a cryptocurrency’s delisting meaning, you shouldn’t be surprised anymore and actually understand some of the reasons behind it as you see more coins being delisted from your favorite exchanges. Given the fact that there are tens of thousands of cryptocurrencies existing today, it is highly unlikely that all of them will succeed.
Add that to the variety of reasons why a cryptocurrency exchange might delist a coin and an ongoing bear market, it should prompt crypto users to be more vigilant than ever. In the meantime, if you suspect any of your crypto holdings to be under threat from the issues listed above, then it might be wise to reconsider your investment.
