In a bid to streamline its operations, global cryptocurrency exchange behemoth, Binance, recently announced its intention to terminate certain leveraged token services. Specifically, support for leveraged tokens linked to Bitcoin and paired with Tether will cease to be by April 3rd, 2021. Leveraged tokens impacted by this decision include BTCUP, BTCDOWN, ETHUP, ETHDOWN, BNBUP, and BNBDOWN.
The termination process will commence on February 28th, with Binance suspending trading and subscription services for the affected leveraged tokens. This development implies an automatic removal of all trade orders associated with them as soon as the deadline hits. Consequently, Binance is advising affected token owners to convert their holdings into other assets prior to the implementation of the suspension.
Post the February 28th deadline, gradual steps will be taken to completely delist and halt the redemption of these tokens from April 1st through April 3rd. This implies that token holders have until April 1st to redeem their tokens for available value.
Failure to meet the redemption deadline may attract a compulsory conversion of the tokens into USDT (Tether). This conversion will be based on the token’s market value on the delisting date, after which they will be removed from holders’ wallets within a period of 24 hours.
Despite their notable benefits, leveraged tokens often come with a caveat. Among them is the exposure to high-risk positions sans the need for maintaining a margin level or worrying about liquidation. Binance, however, warns that trading such tokens also carries inherent risks, including the probable effects of price movements in the perpetual contracts market, premiums, and funding rates.