The AEUR stablecoin, intended to be tied to the value of 1 euro, experienced an unexpected 200% surge on Binance after its recent listing. Initially trading around $1.08, aligning with the EUR-USD rate, it surged to $3.25 before Binance suspended trading due to “abnormal volatility.” Despite this, the last trade recorded stood at $2.89, marking a considerable 167% increase from its intended value.
AEUR, issued by Anchored Coins based in Switzerland, backed by euro fiat assets and overseen by Singapore investor Calvin Cheng, has a $5 million market cap. The sudden surge, however, highlights the vulnerability of stablecoins with low market caps and limited liquidity to potential price manipulation.
This event sheds light on the instability that stablecoins can face on exchanges, as even larger fiat-backed stablecoins have de-pegged over 600 times this year, as reported by Moody’s Analytics.
