Binance halts AEUR stablecoin trading after a 200% surge days after listing

Binance abruptly halts AEUR trading.
The euro-pegged stablecoin experienced an extraordinary 200% surge just one day after its listing.
AEUR is supposedly backed by euro fiat assets.

Binance has abruptly halted trading on the AEUR stablecoin, pegged to the euro, as its value soared over 200%.

The unexpected surge on December 5 raised concerns, leading to a swift response from the exchange. This incident sheds light on the risks associated with stablecoins, particularly those with lower market caps and liquidity.

AEUR’s rollercoaster ride 

The AEUR stablecoin, pegged to the euro at 1:1, witnessed an unprecedented surge of over 200% on Binance, just a day after its listing. Initially trading around $1.08, mirroring the prevailing EUR-USD rate, the token’s value skyrocketed to $3.25 at 17:45 UTC.

Binance promptly suspended trading due to “abnormal volatility,” indicating concerns about the stability of the coin.

#Binance has suspended trading of $AEUR due to abnormal volatility.

Thanks for your patience and our team is working towards reopening trading soon.https://t.co/F80OVDG1qk

— Binance (@binance) December 5, 2023

What is AEUR stablecoin?

AEUR is issued by Anchored Coins, a Switzerland-based subsidiary owned by Singaporean investor Calvin Cheng. Touted to be backed by euro fiat assets, the stablecoin boasts a $5 million market capitalization.

However, its sudden surge and subsequent trading halt underscore potential vulnerabilities. The coin’s lower market cap and limited liquidity create an environment where de-pegging and manipulation risks are heightened.

This unexpected incident on Binance serves as a stark reminder that stability challenges can afflict even seemingly secure stablecoins.