Binance’s Closure of Leveraged Token Services

Binance, the crypto exchange, has announced that it will no longer support certain leveraged tokens connected to Bitcoin, Ether, and BNB starting from April 3. This decision follows Binance’s announcement on February 19 that it would end support for leveraged tokens paired with Tether (USDT). The affected leveraged tokens include BTCUP and BTCDOWN, ETHUP and ETHDOWN, and BNBUP and BNBDOWN. Trading and subscription services for these token pairs will be suspended on February 28 at 06:00 UTC, and all existing trade orders for these tokens will be automatically removed.

Binance advises users to trade their leveraged tokens into other assets before the set deadline. If users fail to redeem their tokens by the delisting date, Binance will convert the tokens into USDT based on their corresponding value. The exchange will then distribute the tokens to users’ accounts within 24 hours and remove the leveraged tokens from users’ wallets. The delisting and redemption process will occur gradually, starting on April 1 and ending on April 3.

Leveraged tokens offered by Binance are derivative products that provide investors with leveraged exposure to cryptocurrencies. These tokens represent a basket of perpetual contract positions and their value is influenced by price movements in the perpetual contract market. By trading these tokens, crypto traders can engage in leveraged positions without needing collateral or worrying about maintaining a maintenance margin level that could lead to liquidation.

While leveraged tokens offer certain benefits, Binance cautions that they also come with risks. These risks include being affected by price movements in the perpetual contracts market, premiums, and funding rates. It is essential for users to be aware of these risks before trading leveraged tokens.

Binance will no longer support specific leveraged tokens linked to Bitcoin, Ether, and BNB after April 3. Trading and subscription services for these tokens will be suspended on February 28, and all existing trade orders will be automatically removed. Users are advised to trade their leveraged tokens before the set deadline or redeem them before the delisting date. Binance will convert unredeemed tokens into USDT and distribute them to users’ accounts within 24 hours, subsequently removing the tokens from users’ wallets. Leveraged tokens offered by Binance provide leveraged exposure to cryptocurrencies without requiring collateral or maintenance margin levels, but they also carry risks associated with the perpetual contracts market.

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