Binance, a cryptocurrency exchange, announced on June 13th that it will convert “zombie assets” into stablecoins to safeguard users’ assets from being “stuck in limbo.” “Zombie assets” are delisted cryptocurrencies whose networks are no longer supported by the exchange. However, Binance did not mention which stablecoin these assets would be converted into.
Recently, a few Binance users expressed concerns about the platform’s updated terms of use, which gave it the exclusive right to transform delisted cryptocurrencies into different digital assets after a specified period. After receiving complaints from users, Binance sent an email to CryptoSlate acknowledging that the wording of its updated terms of use could have been better and that corrections would be made shortly.
Furthermore, Binance stated that the industry was spreading “ongoing misinformation” about the update. The exchange claimed that it had updated the terms of use before the SEC filed a lawsuit against it on June 5th and that the update “has nothing to do with recent market instabilities in the United States.”
According to Binance, it decided to update the terms of use after considering users’ concerns about “zombie assets.” The exchange explained that “Assets that Binance has previously delisted can be held by users in Binance wallets for extended periods of time; however, they can eventually become trapped in users’ accounts (zombie assets) if they are not converted into other assets before a network becomes entirely unsupported.”
Additionally, Binance acknowledged that the wording of the updated terms of use could have been clearer and promised to update them to clarify that assets will only be converted into a stablecoin after a notification period, allowing users to withdraw the delisted asset. Binance’s approach would not change, but the changes would clarify its policy.
Binance is currently facing legal action from the U.S. Securities and Exchange Commission over allegations of violating federal securities law and facilitating the trades of crypto security offerings. Binance has said that it will defend itself in court against these allegations.
Binance has announced that it will convert “zombie assets” into stablecoins to protect users’ assets from getting stuck in limbo. The exchange has received criticism from users due to its updated terms of use, which gave it the exclusive right to convert delisted cryptocurrencies into different digital assets after a specified period. Binance has acknowledged that the wording of its updated terms of use could have been better and promised to make corrections. Binance’s decision to update the terms of use was motivated by users’ concerns about “zombie assets.”
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