If you follow the crypto market only through centralized exchanges (CEXs), such as Binance, the delisting of a cryptocurrency may seem like an unexpected and concerning event.

By delisting, understand: it is when a crypto that was available for purchase on an exchange is no longer available - that product has 'gone off the shelf', you know?

After all, if a token is no longer available for trading on the platform you use, what happens to your assets? How can you ensure that you do not lose your investment? In this article, we will explore these questions in detail.

What is the delisting of a cryptocurrency?

Delisting occurs when an exchange decides to remove a cryptocurrency from its platform, making it unavailable for buying and selling. After delisting, users will no longer be able to trade that asset within the exchange.

However, many platforms offer a transition period for holders to withdraw or convert their tokens before support for the asset is completely terminated. After all, if it were just a removal from the platform, it could cause distrust among all users, something like, 'So any other crypto could come off the shelf at any moment?'

Although it seems like an unusual occurrence, delisting is a common practice in the crypto sector and can happen for various reasons. We will talk more about these reasons next.

What makes an exchange delist a crypto?

The delisting of a cryptocurrency can occur for different reasons, depending on the platform's policy. But there are basically three points that usually generate this type of situation.

One of the main factors is the low trading volume and liquidity, which makes it difficult for users to place buy and sell orders without significant price fluctuations. If a token does not attract many traders, exchanges may choose to remove it to maintain a more efficient trading environment.

In addition, regulatory issues can also lead to the removal of an asset. Some cryptocurrencies face legal challenges, and if they are classified as securities by regulatory bodies, such as the SEC in the US or the CVM in Brazil, exchanges may decide to delist them to avoid compliance risks.

Another determining factor is the security and transparency of the project. If a cryptocurrency is involved in questionable practices, such as scams, hacks, or lack of financial transparency, the exchange may remove it to protect its users and avoid potential losses.

We tell you that there are three main reasons that lead an exchange to delist a crypto project, but the main reason for all of these is very simple: if a crypto poses real risks to those on a platform, it is very likely that that broker's action will be to take that digital asset off the shelf.

What to do when a delisting is announced?

If you receive a notice that a cryptocurrency will be delisted from your exchange, it is essential to act quickly to avoid setbacks. The first step is to check the delisting schedule, as the platform usually sets a deadline for the suspension of trading and withdrawal of assets. Staying attentive to these deadlines is crucial to ensure that you do not lose access to your funds.

After checking the dates, it is necessary to decide between selling or transferring the asset. If the token is still available for trading, one option is to sell it before it is removed. However, if you believe in the potential appreciation of the asset, you may consider transferring it to another exchange that still supports it or to a compatible digital wallet. This decision should be made based on your investment strategy and market behavior.

Regardless of the choice, the most important thing is to execute the action within the deadline set by the exchange. If you opt for sale, complete the transaction before trading is suspended to ensure liquidity. If you decide to transfer, check if the new platform accepts deposits of the token and follow the withdrawal procedures correctly to avoid any loss of funds.

Furthermore, it is important to note that not every delisting means the end of a cryptocurrency. In some cases, crypto projects undergo a token migration process, in which the old assets are replaced by a new version. Many exchanges facilitate this transition automatically, converting the old tokens to the new ones at a 1:1 ratio.

If the exchange announces that the delisting will occur due to a migration, it is essential to follow the official instructions from the platform. For example, on Binance, if there is an automatic swap, the old tokens will be directly replaced in the user's account without the need for any additional action.

However, some migrations may require manual conversion before the stipulated deadline, making it essential to stay attentive to exchange updates to avoid complications.

What are the risks of a delisting? And how to protect against them?

The delisting of an asset can bring some risks that investors should consider. One of the main risks is post-delisting volatility, as the removal of a cryptocurrency from the exchange reduces its liquidity and can result in a sharp drop in price. If many users try to sell the token at the same time, the value may plummet before it can be traded for a reasonable price.

Another common problem is the difficulty of finding another exchange to trade the asset. When a token is removed from multiple platforms at the same time, it becomes more complicated to locate a reliable trading venue. This can force users to resort to P2P (peer-to-peer) markets or lesser-known platforms, increasing security risks and complicating the liquidation of the investment.

Additionally, some exchanges impose a deadline for users to withdraw the delisted tokens. If the investor misses this deadline, they may end up without access to their funds, making it essential to follow official announcements and act quickly to avoid any irreversible loss.

Finally, it is important to evaluate the situation of the cryptocurrency project itself. In certain cases, delisting occurs because the development of the asset has been abandoned or because there are serious flaws in its structure. Before deciding to keep the tokens, it is advisable to check if the project team remains active and if there are prospects for new developments. This way, it is possible to avoid investing in an asset without a future and minimize long-term losses.

It is possible to deal with delisting safely!

The delisting of a cryptocurrency can be concerning, but understanding the process and acting quickly can help minimize negative impacts. If you trade cryptos exclusively through exchanges, the most important thing is to follow the official announcements from the platform, set a quick action plan, and be prepared to make informed decisions.

Remember: planning and information are essential to protect your investment in the crypto world!

#Listing #Segurança

---

Image by wirestock, available on Freepik