While many were unconcerned about the delisting because to its inactivity, others questioned the emphasis on price for delisting, fearing that it would encourage projects to artificially inflate the price.
Mithril (MITH), a decentralized social network project, was recently delisted from Binance, and in exchange, the crypto project requested the 200,000 Binance Coin (BNB) it had to deposit as insurance for listing on the exchange.
Binance CEO Changpeng Zhao aka CZ reacted to MITH’s demand on Twitter with a screenshot of their contract, which indicates that if the listed token price falls below a specific threshold, the exchange has the authority to deduct the insurance fund in part or in full as an additional fee.
CZ stated that the project’s token price went below the trigger threshold on many occasions, and that the project hasn’t updated the community in nearly two years. CZ stated that the “team made the correct decision and operated well within our rights.”
I reviewed this after seeing your post. Here is the contract clause for your (and community) reference. We usually observe confidentiality, until you broke it. The Insurance Deposit is there to encourage builders to continue to build. 1/2 pic.twitter.com/OX34TOmD1g
— CZ 🔶 Binance (@cz_binance) December 16, 2022
Jeff Huang, a well-known Taiwanese musician and nonfungible token (NFT) investor, founded the MITH project. The project’s founder has a shady crypto history, with on-chain analyst ZachXBT accusing him of stealing 22,000 ETH.
The exchange between the Binance CEO and a delisted project drew the attention of the crypto community.
Mithril’s ($MITH, @mithdotio) last tweet was in January 2021 (!!!). The team just abandoned the project and is now requiring listing fees back from #Binance . LOL.
P.S.: 200,000 BNB was around $2m back then. Now it’s around $65.5m pic.twitter.com/iS7kAbpRAp
— Nick (@caysonwilde) December 15, 2022
Many others questioned if it was fair for the exchange to require security insurance in Binance’s native token in order for it to be listed. Another commenter questioned if Binance’s emphasis on delisting based on token price is the correct approach, stating that “if the price has such a high weightage, it will incentivize projects to pump/dump or artificially inflate prices every time it goes below trigger price?”
Binance has been in the headlines over the past week, but not for all the right reasons. Its proof-of-reserve audit became a major topic of discussion as numerous financial professionals expressed worries about the report’s release. CryptoQuant, a crypto analysis outfit, examined its reserve on-chain data and confirmed that there was no FTX-like behavior.
