(Kitco News) –
Binance announced Thursday morning that deposits of USD Coin (USDC) and tether (USDT) on the Solana blockchain “have been briefly suspended till additional discover,” inflicting the blockchain’s SOL token to check its post-FTX low of $12.45.
The transfer comes hours after one other crypto alternate, OKX, announced that it will delist USDC and USDT on Solana altogether, and can now not assist their deposits or withdrawals.
The Binance suspension is a major setback for Solana. The blockchain and its native SOL token have been among the many hardest hit by the implosion of FTX and Alameda, and with good cause: the now-bankrupt Alameda was the single-largest backer of SOL and former CEO Sam Bankman-Fried personally promoted it as an Ethereum different.
Due to its shut affiliation with the corporations, as quickly as FTX and Alameda started to return underneath fireplace, the value of SOL offered off in lockstep with FTX’s native FTT token. FTT fell from $22.95 to $2.29 between November 7 and 9, and SOL fell from $32.48 to $12.62 throughout the identical timeframe.
As soon as FTX and Alameda’s belongings start to be liquidated as a part of their chapter proceedings, SOL is predicted to crash additional. In line with the now-infamous balance sheet printed by Coindesk on Nov. 2, which set the collapse of FTX in movement, Alameda was holding $292 million of unlocked SOL, $863 million of locked SOL, and $41 million in SOL collateral.
Past the worth of the SOL token, there are additionally considerations in regards to the underlying Solana blockchain. After the $477 million ‘hack’ of FTX, which many consider was really an FTX or Alameda insider stealing belongings, there have been considerations that the personal keys to the FTX-backed decentralized alternate Serum, which is predicated on Solana, could have been compromised. These keys had been held immediately by FTX, and the scenario necessitated an emergency fork of the protocol to make sure its independence from FTX and Alameda insiders.
Solana posted a fact sheet on Nov. 9 about its publicity to FTX, since up to date on Nov. 15, which claims that the Solana Basis had roughly “$1M in money or money equivalents on FTX.com as of 11/6/22 when FTX.com ceased to course of withdrawals” representing lower than 1% of the Basis’s money or money equivalents, and “none of [their] SOL custodied on FTX.com.”
As of Nov. 14, the Solana Basis wrote that the belongings caught of their FTX.com accounts had been roughly 3.24m shares of FTX Buying and selling LTD widespread inventory, 3.43m FTT tokens, and 134.54m SRM tokens.
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