The governance token, TORN, affiliated with the renowned crypto mixing protocol Tornado Cash, experienced a drastic downturn, plummeting by over 50% on November 26 following Binance’s announcement of its delisting from the exchange. According to CoinGecko’s data, the token nosedived from $3.90 to a mere $1.66 within a day, marking a significant 57% decline in value.
Impact of Binance’s Decision on TORN’s Price
Tornado Cash, known for its cryptocurrency mixing protocol, utilized TORN as its governance token, enabling users to participate in voting for protocol upgrades. However, the announcement by Binance, the largest crypto exchange globally, triggered a substantial negative impact on TORN’s value. Binance unveiled its decision to cease TORN deposits starting December 8, with withdrawal processing scheduled to halt by March 7, 2024.
The token’s sharp decline mirrored the repercussions of Binance’s delisting announcement, hinting at the profound influence such actions by major exchanges can exert on a token’s market performance.
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Regulatory Scrutiny and Delisting Rationale
Tornado Cash encountered regulatory hurdles earlier in August when the United States Office of Foreign Asset Control imposed sanctions on the protocol for allegedly facilitating money laundering, thereby restricting U.S. residents from utilizing the platform.
Binance’s decision, on the other hand, follows the United States Department of Justice’s revelation of a plea deal with the exchange on November 21. As part of the agreement, Binance acknowledged serving U.S. customers without possessing the necessary licensing to operate in the country, contradicting its previous claim of restricting access for U.S. residents.
The exchange attributed the delisting of TORN to the token’s failure to meet Binance’s high standards for listable assets. In an official statement, Binance clarified that their periodic reviews ensure listed assets maintain the expected standards. When a coin or token no longer aligns with these standards or if industry dynamics evolve, a comprehensive assessment is conducted, potentially leading to delisting.
Binance’s stance exemplifies its commitment to maintaining a stringent level of quality and compliance within its listed assets, even if it means removing tokens that no longer meet its criteria.
