Upbit flags HBD and DNT; 'dollar' stablecoin HBD more than triples on the exchange
Coinyong
HBD
Upbit designated HBD and DNT as investment caution assets at 4 p.m. KST on Oct. 16 and halted deposits.
HBD rose on Upbit from about 1,300 won to about 4,790 won by the evening of Oct. 17, after peaking above 6,000 won.
The designation runs through the first week of November, after which Upbit will extend it, lift it or delist.
Hive Dollar (HBD), a stablecoin designed to hold a value of $1, more than tripled on Upbit within a day after the South Korean exchange designated it an investment caution asset. Upbit said at 4 p.m. KST on Oct. 16 that it had flagged HBD and district0x (DNT) and suspended deposits of both tokens. HBD, which traded at about 1,300 won just before the designation, changed hands at about 4,790 won on Upbit at 8:31 p.m. KST on Oct. 17.
Price more than doubles in first minute after 4 p.m. notice
HBD trades only in Upbit's bitcoin (BTC) market. Won prices here are converted using Upbit's Korean won market bitcoin price at the same time. Before the designation, HBD trading was so thin that days passed without a single fill; turnover on Oct. 14 was around 100,000 won. In the first minute after the notice went up at 4 p.m. on Oct. 16, 0.513 BTC (about 56.7 million won) traded.
- Last fill before the designation: 0.00001179 BTC (about 1,300 won)
- Caution designation period begins
- Upbit posts notice and halts deposits; first one-minute close at 0.00002853 BTC (about 3,150 won)
- Rises to 0.000035 BTC (about 3,870 won)
- Peaks at 0.000055 BTC (about 6,040 won), 4.7 times the pre-designation price
- 0.00004355 BTC (about 4,790 won)
HBD turnover on Oct. 16 totaled 16.47 BTC, or about 1.8 billion won. Another 9.6 BTC or so (about 1.06 billion won) traded on Oct. 17 through 8:30 p.m. Upbit also attached a "trading volume surge" caution label to HBD. Divided by the won price of tether (USDT), 1,349 won, Upbit's HBD price at 8:31 p.m. on Oct. 17 was about $3.55.
Still around $1 on the Hive chain
HBD is a stablecoin issued natively by Hive (HIVE), a blockchain built around blogging. The official Hive website says "HBD is built to hold $1USD value." Converting HBD to HIVE on-chain takes 3.5 days and is priced at the median over those 3.5 days. HBD supply recorded on the Hive blockchain on the evening of Oct. 17 was about 31.99 million.
On Hive's internal on-chain market, 1 HIVE traded for about 0.053 HBD on the evening of Oct. 17. At CoinGecko's HIVE price of about $0.051, that puts HBD at around $0.96. Upbit, including Upbit Indonesia, is the only centralized exchange market for HBD tracked by CoinGecko. Upbit said in its notice that any HBD deposited after the designation will not be credited and will all be subject to return.
Upbit's reasons and what comes next
Upbit cited Article 17 of the Enforcement Decree of Korea's Virtual Asset User Protection Act. For HBD, it pointed to combined market capitalization across domestic and foreign exchanges, the trend in on-chain holder numbers, domestic and foreign trading volume and liquidity, and trading support on other exchanges, saying it found "shortcomings and a possibility of harm to users." For DNT, it said it found multiple shortcomings regarding whether the project actually exists and is sustainable, the token's use and function, and its market capitalization.
The designation for both tokens runs through the first week of November (Nov. 2-6). During that time Upbit will review them and decide whether to extend the designation, lift it or end trading support. If the reasons are not resolved, Upbit may decide to delist, and it will announce the outcome in a separate notice. Deposits are the only service Upbit said it was suspending.
Neither token can be traded on other Korean exchanges. Bithumb lists only a Korean won market for Hive (HIVE), not HBD or DNT. On Upbit, HIVE trades in the Korean won market and was at 68.4 won as of 8:30 p.m. on Oct. 17.
DNT, flagged the same day, also drew a rush of trading
District0x (DNT) also trades only in Upbit's BTC market. Its turnover on Oct. 16 was 8.87 BTC, 30 times the previous day's 0.29 BTC, and its price rose intraday from 0.00000009 BTC to 0.00000017 BTC. At 8:30 p.m. on Oct. 17 it stood at 0.00000012 BTC (about 13 won). Upbit also attached a "trading volume surge" caution label to DNT.
Converted at Binance's bitcoin price at the same time ($81,595), Upbit's DNT price was about $0.0098, roughly 24% above the DNT price on U.S. exchange Coinbase ($0.0079).
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