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Why Do Exchanges Delist Tokens?

We delisted the Cobra King (COB) token on June 26, 2024. Many exchanges have also delisted the token recently, and some Quidaxians have been wondering why. 

Here’s a quick guide to help you understand the common reasons tokens get delisted on exchanges.

Low Trading Activity

When a coin doesn’t get traded well on exchanges, it will have low liquidity. That means there are not enough buyers and sellers, and it will be difficult to complete its trades. In that case, some exchanges decide to take it off completely.

Limited Development

Usually, what attracts investors and traders to a crypto project is its roadmap. Projects that lack solid roadmaps and developments over a long period of time will likely fail to meet their promises and potential. That’s another reason exchanges take them down. 

Regulatory Issues 

Every exchange has regulations guiding its listed tokens. There are also broader crypto regulations that exchanges must comply with. If a project fails to meet the set standards or violates any regulation, an exchange can delist it to avoid legal trouble. 

Security Concerns 

One of the major risks crypto exchanges face is security. So, if a coin is a potential threat that can cause security issues for exchanges, they can delist it to protect their users and brand reputation.

Market Manipulation

If an exchange discovers that a crypto project is involved in market manipulation, pump-and-dump schemes, or other crypto scams, it can delist the coin. This is to protect investors from falling prey to such fraudulent activities. 

To learn more about how to avoid scams like ponzi schemes, check out our blog post.

What Can You Do When a Token is Delisted?

Usually, when a token gets delisted from an exchange, you cannot trade it on the platform anymore. So, you should close your positions if any are open and consider selling the coin before the delisting date. 

Since the coin is likely going to lose value, you can convert it to another token for an even more diversified portfolio. In some cases, some exchanges relist such tokens, but this isn’t guaranteed. 

If you prefer to hold the token, you can withdraw it from the exchange wallet and transfer it to your external wallet. Failure to do so may result in you losing your coins.

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