South Korean Exchanges Upbit, Bithumb Suspend SNX Deposits After Warning from DAXA

South Korean crypto giants Upbit and Bithumb have halted deposits for Synthetix (SNX) following a warning from the Digital Asset Exchange Alliance (DAXA). This action was triggered by concerns over the depegging of sUSD, Synthetix’s stablecoin, which saw its value drop significantly below its $1 peg.

• Upbit and Bithumb suspend SNX deposits
• DAXA issues cautionary alert
• sUSD depegs to as low as $0.68
• Synthetix introduces sUSD 420 Pool
• Stablecoin market grows to over $200 billion

The sUSD Depeg Crisis

Synthetix, a prominent player in the decentralized finance (DeFi) space, has faced a major challenge with its stablecoin, sUSD. A stablecoin is a type of cryptocurrency designed to maintain a stable value, typically pegged to a fiat currency like the US dollar. However, sUSD experienced a significant depeg, dropping to $0.68 on April 18, 2025, and only partially recovering to $0.81 by the time of this report. This deviation from its $1 peg has caused worry among investors and prompted regulatory bodies to take notice.

The Digital Asset Exchange Alliance (DAXA), a self-regulatory body in South Korea, issued a cautionary alert for SNX, the native token of the Synthetix protocol. This alert led to Upbit and Bithumb suspending SNX deposits. Upbit went further by placing a cautionary label on SNX, citing the risks associated with sUSD’s depeg and the lack of clear use cases for SNX. Bithumb, while following suit, mentioned that restrictions could be lifted once the issues with sUSD are resolved. Other exchanges, such as Korbit and Coinone, issued investor alerts but did not suspend trading or deposits.

Synthetix’s Response

In response to the depeg, Synthetix introduced the sUSD 420 Pool, aimed at stabilizing the stablecoin. The sUSD 420 Pool is a new mechanism that offers incentives for stakers to lock their sUSD in the pool for a year. By doing so, it aims to reduce the circulating supply of sUSD and help restore its peg to $1. Synthetix founder Kain Warwick has been vocal about these efforts, stating:

“We’re taking immediate steps to address the depeg and restore sUSD’s stability.”

This move is part of a broader strategy to regain investor confidence and ensure the long-term viability of the protocol. However, critics argue that while the sUSD 420 Pool may provide short-term relief, more comprehensive solutions are needed to prevent future depegs.

Broader Market Implications

The depeg of sUSD is not an isolated incident in the stablecoin sector. Other prominent stablecoins, such as USDC and TrueUSD, have also faced similar challenges. USDC lost its peg in March 2023 following issues with Silicon Valley Bank, while TrueUSD fell below $1 earlier in the year. These incidents highlight the inherent volatility and risks associated with stablecoins, despite their intended stability.

Despite these challenges, the stablecoin market has grown significantly, with a market capitalization exceeding $200 billion in 2025. Transaction volumes for stablecoins have also surpassed those of Visa and Mastercard combined, indicating their growing importance in the financial ecosystem. This growth underscores the need for robust mechanisms to maintain pegs and ensure stability.

Regulatory Responses

The Federal Reserve has taken notice of the stablecoin market’s growth and the associated risks. Federal Reserve Chair Jerome Powell has expressed support for a regulatory framework around stablecoins, emphasizing the need for consumer protection and transparency. He stated:

“We must ensure consumer protection and transparency in the stablecoin market.”

The GENIUS Act, currently awaiting Senate approval, includes robust reserve requirements and strict marketing standards for stablecoin issuers. This legislation reflects a broader regulatory trend towards integrating cryptocurrencies into the financial system while safeguarding investors.

Counterpoints and Criticisms

While Synthetix’s efforts to stabilize sUSD through the sUSD 420 Pool are commendable, some in the crypto community argue that the approach may not be sufficient. Critics point out that the underlying issues causing the depeg, such as the shift in sUSD backing from individual SNX stakers to a shared debt pool, need to be addressed more fundamentally. Additionally, there are concerns about the long-term viability of the protocol if such depegs continue to occur.

Some argue that the stablecoin sector as a whole needs to adopt more transparent and decentralized mechanisms to maintain pegs. This could involve greater oversight and accountability for stablecoin issuers, as well as improved communication with the community to manage expectations and address concerns.

Future Outlook

The future of sUSD and the broader stablecoin market remains uncertain but holds potential for significant developments. Synthetix plans to provide immediate liquidity support and adjust incentives to help stabilize sUSD. Long-term debt-repayment mechanisms are also being considered to prevent future depegs.

From a regulatory perspective, the passage of the GENIUS Act could set a precedent for stablecoin regulation in the US, potentially influencing global standards. As the stablecoin market continues to grow, the need for effective regulatory frameworks and innovative solutions to maintain stability will become increasingly important.

Key Questions and Takeaways

• What prompted South Korean exchanges to suspend SNX deposits?

  The suspension was prompted by a cautionary alert from DAXA due to concerns over the depegging of sUSD and potential risks associated with SNX.

• What measures has Synthetix taken to address the sUSD depeg?

  Synthetix introduced the sUSD 420 Pool, offering incentives for stakers to lock their sUSD in the pool for a year to help stabilize the stablecoin.

• How have other stablecoins experienced similar issues?

  USDC and TrueUSD have also faced depegs, with USDC losing its peg in March 2023 after issues with Silicon Valley Bank, and TrueUSD falling below $1 earlier in the year.

• What is the current state of the stablecoin market?

  The stablecoin market has grown significantly, with a market capitalization surpassing $200 billion in 2025 and transaction volumes exceeding those of Visa and Mastercard combined.

• What is the stance of the Federal Reserve on stablecoin regulation?

  Federal Reserve Chair Jerome Powell supports the development of a regulatory framework for stablecoins to protect consumers and savers.