Binance said in a June 13 email shared with CryptoSlate that it would convert “zombie assets” into stablecoins to protect users’ assets from getting “stuck in limbo.”
Zombie assets are delisted cryptocurrencies whose networks are “completely unsupported by the exchange.”
Binance did not name the stablecoin to which these assets would be converted.
Binance Updated Term of Use (Source: Binance)
However, the exchange claimed industry opposition was spreading “ongoing misinformation” about the update. According to the exchange, it had updated the terms of service before the SEC sued it on June 5, and the update “has nothing to do with recent market instabilities in the United States.”
“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 completely unsupported.”
Binance is currently embroiled in a legal tussle with the U.S. Securities and Exchange Commission over federal securities law violations and facilitating the trades of crypto security offerings. The exchange has maintained that it would defend itself in court against these allegations.