Whether the delisting mechanism could save the crypto-market?

来源:Caijing.com.cn 作者:Guojing 2018/10/31

Most investors begin to lose their faith in blockchain programs and crypto-exchanges. In such tight circustances, crypto-exchanges try to save themselves through delisting.

The Coinmarketcap shows that the market value of global crypto-assets is about $800 billion USD at the beginning of 2018, but until 25 August, it is just $215.8 billion USD, decreasing at $600 billion USD. The highest price of BTC was approaching $1799 USD, while now it decreases to $6712 USD, dropping at 60.5%. The highest price of ETH reached $1355 USD, but now it is $283 USD, decreasing at 79%. By 25th August, the trading volume within 24 hours is $113.24 USD; in contrast, it has reached $60 billion USD at the peak time. No matter the Market Cap, the price of cryptocurrency or trading volume shows that the bearish is coming.

Some news sites report that more than 90% crypto-assets fell on its first day of trading. Most investors are losing their faith in blockchain programs and crypto-exchanges.

“In such tight box, I though crypto-exchanges should try to find ways to save themselves, ”An approaching crypto-exchange administer said.

"Now we have received many complaints. The feedback shows that some projects show badly in trading volume and liquidity, and it is hard for users to trade. We realized that this is an urgent and serious problem because it definitely affects the user experience and lower exchange’s reputation. Therefore, whenever we receive such a complaint, we would immediately take measures and do researches on the trading status and get market feedback, then, communicate with a project team. "The above administer said.

“Complaints are not the main reasons. In fact, crypto-exchanges are tracing the trading status of each program. We heard of that in March, Bittrex delisted 82 cryptocurrencies, and we thought it is necessary to we set up relative delisting mechanism. At first, without the detail, we just send a warning letter to relative project parties.” This administer added.

The administer also mentioned the reason why releasing the announcement until this August, first they need time to set up the delisting detail, and they want to observe market trend, for example, they sent warning letter to some project team in March and they are watching whether they take some measures to fix existed problems, additionally, they are also watching whether there are new problems.

“Through our observation during March and August, the following reasons stimulate us to announce the delisting detail, first, the warning and communicating before is invalid, the project teams seem to ignore these warning and take no measures; second, we found that many project teams seem listing as the final target, as long as listing, their program is regarded as successful and they would do nothing, in contrast, from the perspective of crypto-exchange, we thought when listing, the program begins to operate, and the team should work hard to improve their service, products and use experience. And they should release their weekly or monthly report to tell their loyal customers what you are doing. Finally, it is the responsibility of the crypto-exchange to supervise and constrain the project team. If the project team runaway, the users will hold the crypto-exchange accountable. Therefore, crypto-exchange must find a way to fulfill the obligation; and the delisting rules do not only supervise the team but also to remind and reduce risk. Therefore, it is also valuable in educating users about rational investment.” The administer concluded.

Some authority in industry emphasized that delisting mechanism could make investors and project team realize that listing does not mean the project is great, as far as there are some problems, they would be removed. Delisting is beneficial for the whole industry. Caijing.com.cn has observed 16 crypto-exchange platforms and found that there are 10 platforms have already published their delisting detail. Even though Binance, ZB, Coinex, ABCC, CoinBene, and coinw do not publish delisting announcement yet, Binance relative administer told caijing.com.cn that they are setting up the delisting policy. There are more and more crypto-exchanges release delisting policies in the future.

Caijing.com.cn has categorized crypto-exchanges according to the existed delisting policy into three categories. First, those who have already published the delisting policy and delisted programs, for example, OKEx、LBank、FCoin; Second, only published delisting policy, including Huobi, BCEX; Third, published delisted programs without delisting policy, for example, BitForex、Coinnice、Bit-Z、CoinEgg.

Though observing the above 10 crypto-exchanges’ delisting policies, caijing.com.cn found that they are similar. In any of the following cases, the projects will be delisted:

Project teams intentionally concealed any major events that may seriously affect the token price;

The daily average trading volume of tokens is less than a standard USD or other tokens with equivalent value for the valid time;

Major technical security vulnerabilities (including but not limited to currency forks and unlimited issuances);

Dissolution or change of project team;

The publicity or marketing conduct of project teams damage the interest of crypto-exchange or the community, and the circumstances are serious.

A small crypto-exchange platform relative administer explained.

First, medium and small crypto-exchanges have not invested too many human resources and material resources in monitoring project. So it is impossible to set so many standard dimensions. Second, these crypto-exchanges aware that if they set the listing standard too high, few projects would be qualified, so these crypto-exchanges are unattractive.

It is worth mentioning both crypto-exchanges who have already released delisting policy and those who have not released yet have focused on trading volume and liquidity. “Trading volume and liquidity are the most significant factors to judge a program, so crypto-exchanges are concern about them.” A relative crypto-exchange authority mentioned. The person also claimed that there are several factors to investigate trading volume and liquidity including daily transaction fluctuations and the crypto-exchange would discover weekly or monthly statistics.

Caijing.com.cn statistics shows that every crypto-exchange has a different standard, the detail as follow:

“Besides trading volume, the other important factor is Major technical security vulnerabilities (for example, unlimited issuances) and break law. Other standards are flexible and based on circumstances; crypto-exchanges often send a warning letter, rather than delisting directly.” The above person mentioned

An approaching OKEx person said that they have set up hiding transaction pairs function, once those programs who have broken the rules, the crypto-exchange would hide their program as a warning and give them a chance to fix, after fixing they would renew them. “Even though we would delist a program, we are not going to delist all the trade pair, and we would choose one or two whose worse unless all of them are performing badly.” He added.

Some analysts point out that releasing delisting mechanism benefits the industry, telling initiators that launching on exchanges are not the end rather than the beginning. If their program does not work well, it would be delisting. This is a mechanism for selecting the superior and eliminating and the process of speed up bubble burst.

An analyst worries that there are some exchanges, including Binance have not release their delisting yet, this means that delisting has not been the industry consensus, which may lead some program once delisting and then transfer to launch on other platforms.

He explains that an announcement does not mean delisting can be executed, instead, it relates to initiators, investors, and exchanges themselves and their interests. From the known exchanges perspective, they may think the delisting may hurt their reputation because investors would dispute that their censor standard. It is harder for medium and small exchanges because during winter, the programs tend to less and less.

A related OKEx person claimed that they have hidden 49 trade pairs and delisted 22 trade pairs. And he replied it is inconvenient to release the delisting detail. However, caijing.com have not searched for any delisting announcement. in addition, caijing.com find that only CoinTiger put the delisting announcement in a conspicuous place. Others just put the announcement as a general one and it is hard to find it.

The analyst claimed that this shows their determination. If they want to encourage this regulation, they would make it so frivolous. Ultimately, it is possible for some exchanges to manipulate the rule subjectively, for example, they have not released any delisting announcement, but delisting the trade pairs directly.

He concluded that because of lack of regulation, and exchanges are globalization, so it is difficult to define crypto-exchanges fall in which regulation. If there is no regulation, the beneficial measure such as delisting mechanism cannot be executed. It deeply relies on their consciousness to obey the rules, while it is hard to make sure everyone is conscious, therefore, it is still a long run.