The world’s biggest crypto exchange, Binance, announced recently that it was suspending deposits on the Solana blockchain of stablecoins USDT and USDC.
Since the announcement, it has reopened USDT deposits on Solana. USDT is the stablecoin that belongs to Tether, while USDC belongs to Circle.
Both stablecoins exist on numerous blockchains, including Ethereum and Solana, and are pegged to the US dollar.
No explanation
Binance did not give any explanation as to why it had made this decision. It should be noted that it was not the only crypto exchange to have paused withdrawals of the Solana-based versions of the two leading stablecoins.
This week, crypto exchange OKX also announced that it would remove the two stablecoins on the Solana blockchain, which means that users will not be able to make deposits or withdrawals in the two tokens anymore.
An email had also been sent out by crypto exchange Crypto.com in the previous week, which cited ‘recent market events’ as the reason for suspending deposits and withdrawals of USDC and USDT based on the Solana blockchain.
It should be noted that people who use the Solana network for using the two stablecoins will be impacted because of these decisions.
Users who are making withdrawals and deposits in the two stablecoins on other networks will remain unaffected. These include Polygon, Algorand, and Ethereum.
Confusion
Similar to Binance, Crypto.com and OKX did not provide a detailed explanation for their decisions. The chief executive and co-founder of Cirlce, Jeremy Allaire was also confused.
He said that the Solana-based USDC was also issued by Circle and did not have any problems. He went on to say that the motivations behind the actions of the exchange were unclear and it was quite disappointing.
Solana tanks
Last week was one of the most turbulent weeks to have been recorded in the history of the crypto industry, as it saw the downfall of the FTX crypto exchange.
Since it occurred, the SOL token of the Solana network has been performing rather poorly. Due to FTX filing for bankruptcy, almost every token in the market dipped.
However, it was the SOL token of the Solana Foundation that seemed to take the biggest hit, as its value was battered.
CoinGecko’s data shows that the value of the token has plunged 94.9% at the time of writing, as it is down to $13.13 from $259.96.
On November 5th, the token reached a peak of $38.03, but it declined from that value as well. Moreover, there was also significant exposure to FTX of the Solana Foundation.
It had about 3.43 million FTT coins, which is the FTX’s native token, common stock of FTX Trading LTD of 3.24 million shares, and $1 million worth of assets on the exchange itself.
As of November 6th, it also had SRM tokens of about 134.54 million. These tokens belong to the decentralized exchange Serum, which was also affiliated with FTX.
It is possible that Solana’s troubled situation could have prompted the exchanges to come to this decision.
