The leading exchanges started blocking Solana-based stablecoins. Will it suffer the same fate as FTX?

Something very unusual is happening with Solana — many of the world’s leading exchanges are blocking withdrawals of deposits made with this blockchain. What does it all mean? While panic is growing around the project, we are trying to understand the possible reasons for blocking.

Who are the blockchains affecting?

According to multiple reports, the Solana blockchain is now affected by the blocking of stablecoins input/output by multiple cryptocurrency exchanges. Currently, the following exchanges are involved in blockchains:

• Crypto.com.
• OKEx.
• Binance (according to some reports blocking has been partially lifted).
• Bybit (no official blocking, but users complain about the inability to withdraw).
• BitMEX.
• A lot of small exchanges, such as Canadian Newton.

In the background of all this strange activity, SOL token price keeps falling, further dropping about 7% in the last two days.

Two hypotheses of mass blocking

Let’s say right away that there is no clear official explanation for what is happening, it seems to be done because of the strong involvement of the Solana project in the FTX business, which recently crashed by declaring bankruptcy. FTX has a huge amount of SOL coins that could be sold at any time, and conversely, the Solana project has reserves in FTT tokens, the fate of which is now unclear. 

We covered these Solana risks in detail in our earlier article, but now the situation has worsened. So, at this point, there are two versions of the explanation for the blocking:

• According to the crypto.com CEO’s version, the blockchains are related to the security of supporting stablecoins on this particular blockchain:

FTX was an important bridge/venue for SOL-based stablecoins, we do not want any additional risk to our users coming from this area, hence disabling it.

Another user explains this danger:

A lot of risk if FTX or Alameda are holding the bridged assets. I think Alameda owns REN and the associated assets with that too. Surprised more exchanges haven’t made this move yet now that I think about it.

• As a second alternative, the reason for the ban is the recent hacking of FTX (which happened just after its bankruptcy):

It had a lot to do with the hack of FTX I believe, due to a large amounts [sic] of BTC that was wrapped on Solana and used it as a vehicle to sell out, get stablecoins a [sic] on the network. Binance ain’t having none of that laundered through them.

Even USDT emitters are forced to respond to the situation with Solana, redirecting actually frozen stablecoins to other blockchains:

All of this together creates a strong wariness about the future of Solana. Not only does this pressure lead to a chronic decline in the price, but the fear of a complete collapse along with the example of FTX further fuels the sense of panic.