Binance has announced the delisting of four coins from its platform: Bytecoin (BCN), ChatCoin (CHAT), Iconomi (ICN), and Triggers (TRIG). Following the announcement, each coin was down at least 30% across the ecosystem except for Iconomi which was down approximately 10%.
Bytecoin, ChatCoin, and Iconomi are well distributed across various exchanges, so trading should not be hampered too badly. Triggers, however, could have some difficulty as it was only trading on Binance and was down nearly 50%. It is a Counterparty asset and should therefore also be tradeable on the Counterparty DEX.
In the announcement, Binance listed some factors that it considers in its quality standards. The company did not specify which factors contributed to the decision to delist each coin.
Of specific interest is the delisting of Iconomi (ICN). None of the factors listed in the announcement mentioned whether a coin being a security was a factor. But this is the primary reason for the Iconomi delisting.
Iconomi is changing its legal structure to be fully compliant and has planned to exchange ICN tokens for security tokens. This had been announced previously. It is not clear if the delisting was coordinated between the Binance and Iconomi teams, but it comes off awkward, especially since the market reacted negatively.
We have warned about this eventuality, specifically in our July portfolio update and just recently as Poloniex also delisted coins and made some significant compliance-related moves.
This is just the beginning of the culling in cryptoassets we have long referred to. There was a slew of tokens created beginning in 2016 through today. Many of those platforms either don’t need to have their own tokens or don’t need to have a token at all. The market will ultimately correct that situation by eliminating many of the weaker ones through attrition. This long bear market has brought many alts to all-time-lows. Expect some to continue down to oblivion.
As the SEC and other regulatory agencies flex their muscles, exchanges will come under more pressure to delist securities or suffer consequences. We could imagine an industry-wide cleansing of weaker tokens, coins, and exchanges in the coming year. Be prepared.