How do Exchanges Handle Forked Coins?

20 May 2018

 
Among the top 20 cryptocurrency exchanges by volume, policies on hard forks tend to be relatively homogeneous. Most have strict policies in place to protect existing clients, and by default, forked coins are not supported. Nonetheless, most exchanges have chosen to list Bitcoin Cash (BCH), which for some, entailed an extended review process of up to 5 months before being listed. Another well known forked coin, Bitcoin Gold (BTG), has been listed by less than half of the top exchanges, followed by Bitcoin Diamond (BCD). Other recent hard forks such as Bitcoin God (GOD) or Bitcoin Atom (BCA) have only been listed by a handful of the top exchanges, with these coins often being a very niche offering. It is typically these recent niche forked coins that pose the most danger to investors and exchanges, and hence merit the most caution.

 A comprehensive fork policy report

Safety and Security is the Priority

 

Although top exchanges tend to differ on the explicit conditions they impose for listing/supporting any hard fork, they share common ground on their stance on hard fork security, and normally require that hard forks have strong replay protection in place before any consideration. Other conditions that appear across various exchanges include the requirement that forked blockchains are stable, usable and offer significant value to their respective clients before being listed. Some highlight the need for the underlying technology behind any forked chain to be integrated, creative and contribute to technological innovation and value. Premining, which allows developers to mine a percentage of the total supply of a forked coin before it is listed on an exchange, poses a risk and is often taken into account when making listing considerations for any coin. Several exchanges might also consider listing a forked coin on the basis of its current market value, as well as the demand for it from their current users.

 

Summary of Mentioned Conditions among the Top Exchanges:

 

  • Forked blockchains must be usable, stable and secure
  • Strong two-way replay protection must be in place
  • The underlying technology behind the forked coin must contribute to value
  • The fork project must have public developers and open source code
  • There must be a testnet available before launch
  • The forked coin has a sizable community
  • Size of the forked coin network much reach critical mass
  • A “clean break" is required. I.e. The new chain cannot be wiped out by the original chain.
  • Official client software must be launched before the hard fork is activated, and must pass open beta test testing and assessment

 

Top Exchanges and Their Policies based on Publicly Available Information

 

Binance

Listed Forked Coins: Bitcoin Cash (BCC), Bitcoin Gold (BTG), Bitcoin Diamond (BCD)

The default position for all of their coins is “no listing”, however they have generally been supportive of past bitcoin forks. After the exchange deems the forked blockchain and wallet as usable and stable pending the same strict listing review process for any other coin or token, they will allow up to 7 days for users to withdraw their forked coins. They reserve the right to change their stance on any specific forks as they deem appropriate.

 

Bitfinex

Listed Forked Coins: Bitcoin Cash (BCC), Bitcoin Gold (BTG)

The exchange may consider listing a hard fork. Any hard fork requires adequate replay protection.

 

OKEX

Listed Forked Coins: Bitcoin Cash (BCH), Bitcoin Gold (BTG), Bitcoin Diamond (BCD), SuperBitcoin (SBTC), BitcoinX (BTX), United Bitcoin (UBTC)

Their general policy is supportive of forked coins under certain conditions. Relevant considerations are the forked coin’s safety and stability, as well as the attractiveness of its underlying technology, the strength of its development team, its market liquidity and compliance characteristics.

 

Coinbase

Listed Forked Coins: Bitcoin Cash (BCH)

Coinbase emphasises safety and security as their top priority, their default position being that they support only one version of a digital currency. Support for certain Bitcoin forks has been considered on the basis of factors such as size of the network, market value and customer demand. Bitcoin Cash (BCH) went live on August 1st 2017, and was eventually implemented after a lengthy review process of 5 months. No support at this time for Bitcoin Gold given its lack of public code availability, which represents a significant security risk. They require reassurance that fork networks are secure, stable, sizeable and valuable.

 

HuobiPro

Listed Forked Coins: Bitcoin Cash (BCH), Bitcoin Gold (BTG), Bitcoin Diamond (BCD), Super Bitcoin (SBTC), BitcoinX (BCX)

Their stance towards forked coins is supportive yet conditional. They support hard forks that are based on an integrated and creative blockchain. They do not support random or unexpected forks or premining with no creation or improvement of the blockchain. They claim this doesn’t bring in value and may lead to a splintered community, a messy industry and customer confusion. The hard fork program team must inform Huobi.pro in advance and receive a clear response from Huobi.pro before any hard fork is considered. They also require strong two-way replay protection, a “clean break”, as well as a modification to the block format, such that all wallets (including light clients) are required to upgrade to follow the hard forked chain. Finally, they require that official client software is launched before the hard fork is activated, which needs to pass an open beta test and assessment.

 

BitTrex

Listed Forked Coins: Bitcoin Cash (BCC)

Their default position is to not support forks. They may decide to support a forked coin on the basis of the existence of a development team and if they have contacted Bittrex previously. They also consider coins on the basis of whether a coin has public developers, aTestnet, or its code is available publicly. They take into account whether there is premine for a particular coin.

 

Kraken

Listed Forked Coins: Bitcoin Cash (BCH)

Does not support forked coins as a default position.

 

Bitstamp

Listed Forked Coins: Bitcoin Cash (BCH)

Does not support forked coins as a default position. After careful consideration, they may accept a forked coin on the basis of volume, the security of the forked blockchain, and safety.

 

HitBTC

Listed Forked Coins: Bitcoin Cash (BCH), Bitcoin Gold (BTG) , SegWit2x (B2X) Super Bitcoin (SBTC)

Does not support forked coins as a default position, but supportive if conditions are met.

 

Poloniex

Listed Forked Coins: Bitcoin Cash (BCH), Bitcoin Plus (XBC), Bitcoin Dark (BTCD)

Does not support forked coins as a default position. Forks must have replay protection as a minimum, security focused.

 

TrustDEX

Listed Forked Coins: Bitcoin Cash (BCH)

No policy information found

 

bitFlyerFX

Listed Forked Coins: Unclear

Conditions include that splits must be permanent and secure, as well as solid in terms of legality and compliance, in order to support both BTC and BTG.

 

Gemini

Listed Forked Coins: Bitcoin Cash (BCH)

Does not support forked coins as a default position. Following a technical evaluation of Bitcoin Gold, they determined that it is still early in its software development phase. As a result there is technically no way they could support Bitcoin Gold at this point, even if they wanted to. If Bitcoin Gold ever becomes a viable cryptocurrency, they might consider offering Bitcoin Gold (BTG) withdrawal capabilities, similar to what they have done for Bitcoin Cash (BCH) and Ethereum Classic (ETC).

 

Liqui

Listed Forked Coins: Bitcoin Cash (BCH)

Pending the release of BCH, they monitored network stability and enabled trading and deposits when they believed it was deemed safe to do so.

 

Gate.io

Listed Forked Coins: Bitcoin Cash (BCH), Bitcoin Gold (BTG), Bitcoin Diamond (BCD), Super Bitcoin (SBTC), Bitcoin God (GOD), BitcoinX (BCX), Bitcoin Faith (BTF)

They stated that they may open trading for hard forks with stable operations, also drawing attention from the majority of their users.

 

Bithumb

Listed Forked Coins: Bitcoin Cash (BCH), Bitcoin Gold (BTG)

Listing of forks depends on the circumstances of the forked coin networks.



EXX

Listed Forked Coins: Bitcoin Cash (BCC), Bitcoin Diamond (BCD), Super Bitcoin (SBTC), United Bitcoin (UBTC), Lighting Bitcoin (LBTC)

No policy information found

 

Kucoin

Listed Forked Coins: Bitcoin Cash (BCH), Bitcoin Gold (BTG), Bitcoin Diamond (BCD)

Will support and credit all forks that provide valid access to the ’blockchain backend’.

 

Exmo

Listed Forked Coins: Bitcoin Cash (BCH)

Does not support forked coins as a default position. Hard forks must go through the necessary security verification, and there should be access to hard fork blockchain transcripts.

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