Top cryptocurrency exchanges in South Korea have suspended deposits for Synthetix (SNX) tokens following a stern warning by a top regulator in the country. The Digital Asset Exchange Alliance (DAXA), a top regulatory set up, flagged the SNX token with warnings, advising South Korean investors to trade the token with caution.
In a blog post on Thursday, Upbit told users to avoid the token ticker, advising that they should trade the cryptocurrency with a careful approach. According to the exchange, the deposit of the SNX token has been suspended due to some negative trends relating to the coin.Â
According to the exchange, the move became a must after sUSD, a stablecoin collateralized by the SNX cryptocurrency, lost its peg against the US dollar. Upbit said the development may cost investors and holders of the token a lot, therefore, reducing their exposure to SNX.
Upbit added that the token lacks a particular use case, emphasizing that such a cryptocurrency will inflict huge losses on those with significant exposure to the project. Meanwhile, in the statement, the cryptocurrency exchange promised to carry out an insightful review on the project to determine the next line of action.
The digital assets trading platform said it may decide to delist the asset or resume proper operations including deposit for the project. Similar to Upbit, other top South Korean exchanges like Bithumb, Korbit and Coinone all attached a cautionary label to the SNX coin, urging investors to trade the token carefully.
Sidenote on SNX token and sUSD stablecoin
For most of the first quarter of 2025, the sUSD stablecoin struggled to maintain its USD peg before eventually recording a five-year low on April 10. Consequently, the stablecoin dipped to $0.83 leading to questions about the reliability of the project, while instigating comparison to the downfall of Terra USD.
At the height of the crisis, on April 18, the USD-pegged stablecoin went down to $0.68 as SNX plummeted to record a massive dip of 26% within a month. In response, the founder of Synthetix, Kain Warwick said the project team has released a new staking system to address the shortcomings.
The founder vowed to put more pressure on stakers if things failed to improve as a result of the newly introduced mechanism. However, following the warning by the executive, the stablecoin has grown by 27% nearing $0.87 but still way short of its dollar peg.
Warwick said the new staking mechanism encourages stakers to lock their uSUD coin for a year to receive a share of 5 million SNX coins. According to CoinmarketCap, the SNX token has rallied by 19.09% in the seven days, reflecting how the token is gradually bouncing back.
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