Why Binance And Top Crypto Exchanges Halt Transactions With Solana Stablecoins

Binance and other top crypto exchanges halted stablecoin deposits from the Solana (SOL) blockchain. The companies released an official statement claiming that the measure will be temporary, but it could have harmful implications for the SOL ecosystem. 

Solana (SOL) trades at $13.5, with a 5% loss in the last 24 hours and a 3% loss in the previous week. The cryptocurrency is recording significant losses across all timeframes due to the recent event surrounding FTX and the contagion impacting the crypto industry. 

Binance, OKX, Bybit, and other top crypto exchanges took a similar measure. The platforms suspended operations with stablecoins USDC and USDT on Solana but failed to explain their decision to the users. 

For example, Binance posted the following message via its social networks and its official website:

Fellow Binancians, Deposits of USDC (SOL) and USDT (SOL) have been temporarily suspended until further notice. Thanks for your support!

The crypto trading venue didn’t specify when they will resume stablecoin operations with Solana. OKX took a stricter measure by fully delisting the digital assets. Similar to Binance, the exchange kept its reasoning in the dark. 

Across social media, users have been speculating about the reasons for this decision by crypto exchanges. Some believe the delisting is motivated by the collapse of FTX and its former CEO and founder Sam Bankman-Fried. 

The former FTX executive was a well-known Solana bull. The collapse of FTX might create unforeseen consequences across crypto companies, projects, and crypto ecosystems. The market believes recent events could negatively impact SOL. 

Bankman-Fried and other FTX investors were thought to have accumulated millions of dollars in SOL. The company is in the middle of its bankruptcy process. Therefore, there are expectations that the Bankruptcy court might order the liquidation of any funds in Solana or other cryptocurrencies in this proceedings. 

I’ll buy as much SOL has you have, right now, at $3.

Sell me all you want.

Then go fuck off.

— SBF (@SBF_FTX) January 9, 2021 

If so, SOL’s price could face massive selling pressure. Anything FTX-backed or linked to the failed crypto exchange seems at risk of following its path.