What Is Delisting?
Also known as: Delist, Token Delisting
In short
Delisting is the removal of a cryptocurrency or token from an exchange's trading pairs so that it can no longer be bought or sold on that platform; it is usually announced in advance and users are given time to withdraw their assets.
Exchanges review listed assets at regular intervals. Low trading volume and liquidity, a halt in the project's development, security vulnerabilities, the team failing to meet its obligations or regulatory requirements are common reasons for delisting decisions. For example, privacy-focused coins such as Monero have been delisted from some exchanges on compliance grounds.
The process generally begins with an announcement; on the set date, trading pairs are closed, deposits are halted, and users are given further time to withdraw. What exchanges do with assets not withdrawn by the end of this period varies; some may convert the balances into another asset.
Delisting announcements often cause sharp price drops and loss of liquidity because channels of access to the asset narrow. The asset may continue to trade on other exchanges or on decentralized exchanges. For this reason, how many different platforms an asset trades on and with how much volume is an important indicator in assessing liquidity risk.
Last updated: · This content is for information purposes only and is not investment advice.