The cryptocurrency exchange FCoin announced its delisting rules on July 12th, marking a significant step forward in regulatory progress for an industry that has historically focused more on onboarding projects than enforcing accountability. But will this move trigger a wave of delistings?
FCoin’s New Delisting Framework
FCoin founder Zhang Jian stated in early July that the platform’s delisting system would gradually improve. Two weeks later, FCoin released its formal delisting rules, effective July 16th. Key provisions include:
- Legal Compliance Failure: Projects accused of fraud, money laundering, terrorist financing, or pyramid schemes will face delisting if they fail to provide evidence or refuse to pay a risk deposit after being notified.
Reporting Negligence:
- Missing two consecutive weekly progress reports triggers a warning.
- Four consecutive missed reports result in delisting for failing disclosure obligations.
Price Collapse:
- Trading below 50% of the token’s issuance price for 15 days warrants a warning.
- Extending to 30 days initiates a public investigation for potential misrepresentation during listing, with possible delisting.
Low Liquidity:
- Average daily trading volume under 100 ETH for 15 days issues a warning.
- Persisting for 30 days leads to delisting for failing liquidity requirements.
- Community Harm: Projects damaging FCoin’s community interests through public actions face delisting if unresolved.
- Risk Events: Hacks, undisclosed token minting, or other major risks prompt immediate delisting.
👉 How do delisting rules impact crypto investors?
Comparing Global Delisting Standards
Unlike FCoin’s open listing approach, other exchanges lack transparent delisting criteria. For example:
- Bittrex vaguely cites factors like regulatory issues, poor execution, or user complaints for delisting.
Nasdaq enforces strict ongoing requirements:
- Minimum $4M tangible net assets, $5M market cap, or $50M total assets/revenue.
- Stocks trading under $1 for 30 days enter a 90-day remediation period before delisting.
From 1985–2008, Nasdaq delisted 12,965 companies—more than its IPOs. This "survival of the fittest" approach contrasts sharply with markets like China’s A-shares, where firms often manipulate finances to avoid delisting.
Could Crypto Follow Nasdaq’s Path?
FCoin’s rules prioritize investor protection but may inadvertently encourage price manipulation by projects nearing thresholds. The critical question: Will exchanges proactively purge low-quality assets, or mimic A-shares’ stagnation?
FAQs
1. What triggers a crypto project’s delisting?
Common reasons include legal violations, lack of transparency, prolonged low liquidity, or harm to the exchange’s ecosystem.
2. How do FCoin’s rules compare to traditional markets?
They mirror aspects of Nasdaq’s framework (e.g., price/liquidity thresholds) but are less comprehensive than mature financial systems.
3. Could delisting rules stabilize crypto markets?
Yes—by removing fraudulent or inactive projects, exchanges can enhance credibility and investor trust long-term.