Korea’s DAXA Flags Synthetix’s SNX After sUSD Depegging – Coincu

Upbit and Bithumb, leading cryptocurrencies in Korea, have suspended deposits of Synthetix’s SNX following the depegging of its stablecoin, sUSD. The suspension aligns with the Digital Asset Exchange Association of Korea’s (DAXA) warning designation.

The event underscores potential systemic risks within stablecoin ecosystems. This scrutiny raises concerns over Synthetix’s stablecoin management strategies and exchange-based trading impacts.

The Synthetix protocol’s recent depegging incident

Involving the sUSD stablecoin, this has led to its designation as a trading warning product by the Digital Asset Exchange Association of Korea. Upbit and Bithumb, prominent exchanges, have suspended SNX deposits until the end of May. Kain Warwick, Synthetix’s founder, publicly addressed the protocol’s emergency measures.

Changes due to the event include a shift in the Synthetix ecosystem as the emergency response involves a USD 420 pool, incentivized by 5 million SNX tokens. This action aims to create demand for sUSD, stabilizing its value. Bold steps, including potential integrations with Aave and Ethena, are underway. DAXA’s intervention highlights regulatory scrutiny, although no statements from DAXA or exchange officials have been reported.

“This is one of the worst immediate solutions to create demand for sUSD from the user base.” – Kain Warwick, Founder, Synthetix

SNX Price Fluctuates as Regulatory Scrutiny Intensifies

Did you know? Stablecoin depegging often leads to sharp trading halts, emergency responses, and can cause long-term trust loss.

Synthetix (SNX) currently trades at $0.70, with a market cap of $238.85 million and a 38.50% increase in daily trading volume to $44.78 million, according to CoinMarketCap. The SNX price has dropped by 3.35% over the last 24 hours and by 56.78% over 90 days.

The Coincu research team explains that the sUSD depegging, resulting from incentive misalignment due to SIP-420, offers a learning moment for stablecoin risk management. These developments push for a reevaluation of protocol incentives and staker protections, emphasizing regulatory attention in decentralizing finance.