A decentralized social networking project called Mithril (MITH) was recently delisted from Binance, and in return the crypto project demanded the 200,000 Binance Coin (BNB) it had to pledge as insurance for listing on the exchange.
Binance CEO Changpeng Zhao aka CZ responded to MITH’s query on Twitter with a screenshot of their contract, suggesting that the exchange has the right to deduct part or all of the insurance fund as an additional fee if the listed token price falls below one certain threshold falls.
CZ said that the token price of the said project has fallen below the trigger multiple times and after looking at the project, the community hasn’t updated it for almost 2 years. CZ claimed that “the team made the right decision and acted fully within our rights.”
Their token price is well below the trigger levels. read comments. Your site is offline. You haven’t tweeted or updated your community for almost 2 years. I believe our team made the right decision and acted fully within our rights. Regards. 2/2
— CZ Binance (@cz_binance) December 16, 2022
The MITH project was founded by Jeff Huang, a famous Taiwanese musician and a popular Nonfungible Token (NFT) investor. The project’s founder has a tainted crypto record with on-chain analyst ZachXBT accusing him of embezzling 22,000 ETH.
Related: CryptoQuant verifies Binance’s reserves and reports no “FTX-like” behavior
The exchange between Binance CEO and a delisted project caught the attention of the crypto community. While many in the crypto community were quick to point out that the MITH project has ceased to exist as of early 2021 and the 200,000 BNB listing insurance was only worth $2 million at the time of deposit compared to its current market value of 53 million dollars.
Mithrils ($MITH, @mithdotio) last tweet was in January 2021 (!!!). The team just abandoned the project and are now reclaiming the listing fees #binance . lol
PS: 200,000 BNB was about 2 million dollars back then. It’s now around $65.5 million pic.twitter.com/iS7kAbpRAp
— Nick (@caysonwilde) December 15, 2022
Many others questioned whether it was fair for the exchange to require security insurance in Binance’s native token in order to be listed. Another user questioned whether Binance’s focus on delisting based on the token’s price is the right approach, considering “if price has such a large weight, every time it falls below the trigger price, it would force projects to to pump/dump prices or artificially inflate prices?”
Binance has not responded to Cointelegraph’s question at press time.
Binance has been in the headlines for the past week, but not for the right reasons. The proof of reserve test became a hot topic of discussion as many financial professionals expressed concerns about the shared test. Crypto analytics company CryptoQuant analyzed its reserve on-chain data and assured that there was no FTX-like behavior.