Major Exchanges are Delisting Coins as some Platforms Begin to Falter

Although crypto values have remained relatively stable for several weeks, overall activity across the crypto space continues to grow rapidly. Development is at an all time high, and more of the general public is developing an interest in crypto investment. Not surprisingly, exchanges are beginning to place a greater degree of scrutiny on crypto platforms, with delistings becoming more common.

Earlier this week, Binance announced the delisting of Chatcoin, Bytecoin, Iconomi, and Triggers. The exchange did not specifically address the reasons for delisting these coins, but it has indicated that lack of development progress, and a general failure of the teams to maintain public communication played a role. Over the past few weeks other major exchanges have also delisted coins for quality issues. Last month Bittrex delisted Bitcoin Gold, and Poloniex delisted nine coins.

The crypto market is maturing, and top exchanges are clearly interested in evolving into mainstream portals for purchasing blockchain assets. To that end, these delistings demonstrate how exchanges are holding cryptocurrency platforms to higher standards in an attempt to earn the public’s trust. Although expected to be neutral players in the process of crypto trading and acquisition, exchange operators understand that offering substandard, or fraudulent, coins can cause serious harm to their public image. Doing so can also bring legal action, or unwanted scrutiny from lawmakers.

The delisting of a coin from a major exchange is devastating to its market cap. The four to be delisted from Binance dropped more than thirty percent within an hour of the announcement, and have continued to decline. This fact underscores the significant influence exchanges now have on the crypto space. Although all agree that delisting can be a useful means of protecting the public, and is often warranted, critics charge that exchanges are too secretive with the process, and do not apply uniform standards to all platforms. Some exchanges have even been accused of extorting platform teams by demanding payments to avoid be dropped.

For their part, exchanges have taken greater steps to be transparent about the listing, and delisting process. For example, Changpeng Zhou, CEO of Binance, recently posted detailed advice for platforms seeking listing. Also, Bittrex, Bitflyer, Gemini, and Bitstamp have created the Virtual Commodity Association, an organization seeking to create standards for a wide variety of exchange activities, which includes transparent listing and delisting criteria.

It is worth noting that the trading process will soon become more complex as decentralized exchanges (DEXs) grow in popularity. It is possible that DEXs will enable platform teams, and consumers to have full control over which coins can be traded. Atomic swaps may also play a role in this process.

There is little doubt that more cryptocurrencies will be targeted for delisting in the coming weeks and months, as investors will increase expectations for development and progress. It is evident that this process demonstrates that the early phase of crypto adoption is coming to an end, and mainstream use of blockchain technology is about to begin. By holding coins to a higher set of standards, exchanges are playing a key role in determining which platforms will move forward and gain widespread adoption.

 

Featured Image via BigStock.

from WebHits.io Blog http://blog.webhits.io/major-exchanges-are-delisting-coins-as-some-platforms-begin-to-falter/