South Korean Exchanges Freeze SNX Deposits as sUSD Depegging Deepens

DAXA Labels SNX 'Cautionary' After sUSD Slumps to $0.68, Triggering Market Response

Upbit and Bithumb, two of South Korea’s largest cryptocurrency exchanges, halted deposits for Synthetix Network Token (SNX) on April 24, 2025, after the Digital Asset Exchange Alliance (DAXA) designated the token as a “cautionary item.” The move followed growing instability in sUSD, the stablecoin issued by the Synthetix protocol, which relies on SNX as collateral. DAXA’s warning marked a formal step toward containing potential investor risks, as SNX's price volatility became more closely linked to sUSD’s ongoing depegging.

sUSD, which is supposed to maintain a 1:1 peg with the U.S. dollar, sharply declined over recent weeks. On April 10, the token dropped to $0.83, and by April 18, it had plunged to $0.68 — its lowest level in five years. Although it rebounded to $0.87 by April 24, the dollar peg remained broken, prompting renewed scrutiny over its underlying collateral structure. SNX, which serves as the primary collateral backing sUSD, tumbled by 26% over the last 30 days amid the growing concerns.

Upbit responded by tagging SNX with a trading caution and halting all deposit activity for the token. The exchange cited sUSD’s volatility and the broader uncertainty over SNX’s utility, stating that the asset currently lacks clear use cases. A full review is underway, with Upbit indicating that a decision on whether to reinstate deposits or proceed with delisting SNX will be made by the end of May 2025. Meanwhile, Bithumb echoed similar concerns, also suspending SNX deposits and adding a cautionary tag, though it left the door open to reverse the decision should the situation stabilize.

Other major exchanges in South Korea, including Korbit and Coinone, have taken a more measured approach. While they did not suspend trading or deposits, both platforms issued investor alerts and applied caution labels to SNX, warning users of potential risks. The collective response from domestic exchanges underscores growing apprehension over the health of sUSD and its ripple effects across the Synthetix ecosystem.

Synthetix founder Kain Warwick has urged SNX stakers to transition to a newly proposed staking mechanism aimed at stabilizing sUSD. He warned that further inaction could lead to added strain on existing stakers. The Synthetix team also announced a suite of short-, medium-, and long-term mitigation plans to address the stablecoin's fragility, though specific technical changes remain under discussion.

Following the exchanges’ announcements, SNX fell nearly 5% in the hours that followed, trading around $0.69 with a market cap hovering near $235 million. Although sUSD staged a modest recovery, analysts remain skeptical about a full re-peg in the near term. Rob Schmitt, co-founder of Cork Protocol, drew comparisons to the 2022 collapse of Terra’s UST but emphasized that sUSD operates under a more manageable debt model, potentially allowing for a less severe outcome if swift adjustments are made.

With May’s end as the review deadline, SNX’s fate now hinges on whether Synthetix can restore sUSD’s stability and reassure both investors and regulators. Upbit has not ruled out further action, while Bithumb has signaled openness to reversing restrictions, contingent on meaningful improvements in collateralization and peg recovery.

This article has been refined and enhanced by ChatGPT.