After its token was delisted, Mithril requested that the exchange return its deposit of 200,000 BNB.
Binance CEO Changpeng Zhao revealed why the exchange did not return Mithril’s 200,000 BNB deposit following yesterday’s delisting.
Mithril, a blockchain startup, said that it deposited 200,000 BNB to Binance in 2018 as part of the exchange’s listing procedure, which was worth around $1 million at the time. But the initiative lost popularity and was removed from the list yesterday. The team sought the return of these tokens, which are today valued at more than $50 million.
The head of Binance explained why the exchange opted to retain Mithril’s money. Zhao suggested that the team took the correct choice (in refusing to release the deposit) by asserting that it behaved within its legal rights. Since the project’s website was unavailable, he said on Twitter that the Mithril team had broken the listing requirements.
In response to Mithril, Zhao said, “Your token’s price is much below the trigger thresholds. Reading the comments section. Your website is unavailable. You have not tweeted or spoken with your community in almost two years. I feel our team made the correct choice and behaved within our legal rights.”
Zhao stated that the team might accept the deposit made by a cryptocurrency project under two conditions. The first is if the price of the token trades below a specific trigger level for more than 15 days, and the second is if the project, its token, and/or its users have a “substantial detrimental consequence.” The failure of the team’s communications was included as the second condition.
“The Insurance Deposit exists to incentivize builders to continue construction,” Zhao stated, hinting that Mithril’s crew had ceased work on the project.
When tokens no longer satisfy Binance’s requirements, they go through a review process and may be delisted, according to a Binance representative. “The insurance deposit was collected in 2018 as a tool to monitor and incentivize project performance, which is in our users’ best interests,” they said.
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