South Korean Exchanges Upbit and Bithumb Suspend Deposits of Synthetix (SNX) Tokens

South Korea's leading crypto exchanges, Upbit and Bithumb, suspended deposits of Synthetix (SNX) tokens after a warning issued by the Digital Asset Exchange Alliance (DAXA).

South Korea's leading cryptocurrency exchanges, Upbit and Bithumb, have suspended deposits of Synthetix (SNX) tokens following a warning from the Digital Asset Exchange Alliance (DAXA).

What Happened: The organization, responsible for setting security standards for the country's exchanges, added SNX to its risky assets list due to the instability of sUSD, the stablecoin issued by the Synthetix protocol. The stablecoin, which is backed by SNX, has been struggling to maintain its peg to the dollar.

In early April, sUSD fell to $0.83, and days later it dropped to $0.68, reaching its lowest level in five years. This crash also affected SNX, which experienced a 26% loss in a month, setting off alarm bells among regulators and major market operators.

As Upbit reported, it blocked SNX deposits and added a visible warning for users, highlighting the lack of clear utility for the asset and its direct link to the sUSD crisis. The platform also stated it may delist SNX if market conditions don't improve.

Bithumb took a similar step and explained it might cancel the measure if the problems with the stablecoin are resolved.

Other platforms like Korbit and Coinone decided to put warning labels on their listings to notify investors, but they didn't block trading with the token completely.

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Why It Matters: In response to the crisis, Synthetix founder Kain Warwick publicly pressured SNX stakers to adopt a new staking system, aiming to stabilize sUSD. Warwick stated that if participation doesn't reach the required volume to slow the collapse, they will be forced to implement stricter measures.

Following these actions, sUSD experienced a slight recovery, rising 3.7% to $0.87. However, it's still far from its original peg. For now, protocol leaders claim to have short- and mid-term plans to try and reverse the situation, but they haven't revealed any further details about the strategies being developed.