South Korean Exchanges Suspend SNX Deposits Amid sUSD Depegging Concerns

South Korean cryptocurrency exchanges Upbit and Bithumb have taken decisive action by suspending deposits for Synthetix (SNX) tokens. This move comes after the Digital Asset Exchange Alliance (DAXA) flagged SNX for potential risks, designating it as a cautionary item. Assets receiving this designation typically undergo rigorous evaluations to determine whether trading can continue or if delisting becomes necessary.

In response to the designation, Upbit and Bithumb, two of the largest exchanges in the region, announced that they are blocking deposits for SNX tokens on their platforms. Upbit added a trading caution ticker and suspended token deposits, citing concerns over the Synthetix USD (sUSD) depegging. The exchange noted that this event may damage investors due to potential volatility, as SNX is used as collateral for sUSD. Upbit also mentioned a lack of use cases for the asset, which may cause investors to suffer losses. The exchange stated that it would conduct a comprehensive review to decide whether to delist the asset or resume normal operations for the token.

Bithumb also blocked deposits for SNX and added a cautionary tag for the tokens. However, the exchange indicated that this decision could be overturned depending on internal circumstances. If the reason for the designation is resolved, Bithumb said it would lift the restrictions.

Other exchanges, such as Korbit and Coinone, also published investor alerts to caution traders about the asset. These exchanges added cautionary tags to SNX tokens to alert investors who may want to trade the tokens.

The sUSD stablecoin has been struggling to maintain its dollar peg, dropping to a five-year low of $0.83 on April 10. The stablecoin, which is collateralized by the project’s native asset, has faced significant challenges in the first quarter of 2025. On April 18, the stablecoin dipped further to $0.68, with SNX falling by 26% in a 30-day period. A Synthetix spokesperson stated that their team has short, medium, and long-term plans to mitigate the risks.

On April 21, Synthetix founder Kain Warwick threatened SNX stakers with "the stick" if they didn't take up a newly launched staking mechanism to fix the sUSD depeg. The executive said they may put extra pressure on stakers if they don't see enough momentum on the newly implemented mechanism. Since the warning, sUSD prices increased by 27%. On April 24, the stablecoin briefly reached $0.87. However, the token still failed to recover its dollar peg.