Euro-Pegged Stablecoin Skyrockets 200% on Binance Prior to Trading Halt

• Anchored Euro (AEUR) Experiences Sudden Price Surge
• Unexpected Price Spike and Trading Suspension
• AEUR Issued by Anchored Coins
• Potential Reasons for the Surge and Stablecoin De-pegging

Anchored Euro (AEUR) Experiences Sudden Price Surge

The anchored euro (AEUR) stablecoin, designed to be pegged at a 1:1 ratio with the euro, saw an unexpected increase of almost 200% on Binance following its introduction to the crypto exchange platform. Initially, the AEUR-USDT pair was trading around $1.08 for the majority of the day, which was approximately equivalent to the EUR-USD exchange rate at that time, according to Binance's trading data.

Unexpected Price Spike and Trading Suspension

However, the token began to rise sharply around 17:45 UTC with high trading volumes, peaking at a high of $3.25. The sudden volatility in AEUR's price led Binance to suspend trading with the token. According to Binance's order book, the last trade took place at 18:31 UTC at approximately $2.89, which still exceeds the intended value by 167%.

AEUR Issued by Anchored Coins

AEUR is the creation of Switzerland-based Anchored Coins, a wholly-owned subsidiary of Calvin Cheng, a Singapore investor and former parliament member. The token's value is intended to be backed by fiat euro assets, and boasts a market capitalization of $5 million, according to the project's website.

Potential Reasons for the Surge and Stablecoin De-pegging

There doesn't seem to be any clear reason behind the unexpected price surge. A possible explanation could be the token's relatively low market capitalization and limited liquidity, which might make it susceptible to de-pegging through price manipulation. This event underscores the fact that even stablecoins can experience periods of price instability on exchanges. Moody's Analytics reported last month that large-cap fiat-backed stablecoins have de-pegged over 600 times this year.

Edited by Jonathan Stoker