Binance has found itself at the center of controversy once more after a stablecoin listing of the AEUR went terribly wrong. The listing of the Anchored Coins EUR (AEUR) has ended with what can only be described as a disaster that has left the exchange’s users with ample losses.
The Binance AEUR Saga On Monday, December 4, Binance announced that it would be listing a new stablecoin called the Anchored Coins EUR (AEUR). This was another normal listing that went as planned for the exchange and trading began on the same day.
As a way to promote this new stablecoin, the exchange announced zero-fee trading across four AEUR pairs, including AEUR/BTC, AEUR/ETH, AEUR/USDT, and AEUR/EUR. Trading kicked off across all of these pairs on the exchange with volume coming in under $10 million.
For the first day, the stablecoin traded inside its EUR peg, maintaining a value of around $1.06 to $1.08. However, everything would change on Tuesday, December 5, when the stablecoin began to see a lot of volatility which attracted a lot of attention.
Eventually, the stablecoin would ‘depeg’ from the EUR. But unlike normal depegs which would send the price below its peg, the AEUR price started to move up. This happened as Bitcoin crossed $44,000 and volume across the AEUR pairs rose rapidly.
The AEUR stablecoin initially moved up above $2, and once investors caught on to the movement, it attracted a lot of volume. This volume quickly rose to over $20 million and the price of the ‘stablecoin’ continued to fluctuate heavily. Eventually, the coin’s price would cross $3, a 200% increase above it, eventually peaking at $3.25.
One important factor about the AEUR stablecoin is that it has a very low supply. According to the team, the 5 million token supply was to reflect the 5 million EUR that the team held back to the coin.
Eventually, Binance would suspend trading of the AEUR stablecoin at $2.88, citing abnormal volatility as the reason. “Due to the abnormal volatility of AEUR’s price, Binance has suspended spot trading for the AEUR/USDT, BTC/AEUR, ETH/AEUR and EUR/AEUR trading pairs at 18:31:59 (UTC) on 2023-12-05 in order to protect users,” the crypto exchange wrote.
This single move would prove disastrous for users, a lot of whom have already bought into the stablecoin at a higher price. Following this, Binance removed every trace of AEUR from the exchange, deleting its trading pages, as well as deleting it from the recent listing pages.
The only trade of AEUR on the exchange lies in user balances which still show their AEUR balances. However, the exchange has since reduced the price of the token back to its EUR peg which has led to massive losses for users who bought above the peg.
The token’s CoinMarketCap page has also been bared down with its pricing and historical performance removed.
Community Reacts To Stablecoin Delisting Binance users have taken to social media to air their grievances to the exchange for what some have referred to as fraud. One user claims that the exchange suspended AEUR trading because it couldn’t make any money from the high volatility of the stablecoin.
Another X user accused the exchange of scamming its users saying, “You have literally scammed us with the listing of AEUR stable coin. Suspend trading after some minutes later then delist the stable coin. You manipulated the market and wipe out everything.”
Others asked if they would be compensated after the value of their holdings fell drastically from their initial capital after the exchange adjusted AEUR’s price.
Binance has since addressed the complaints and has said that traders who were affected will be compensated. The updated announcement which was posted on Wednesday, December 6, details the calculation of the compensation for each user. The exchange added that compensation will be paid out in the form of USDT vouchers on the exchange.
BNB price falls below $230 | Source: BNBUSD on Tradingview.com Featured image from Forex Quebec, chart from Tradingview.com