Delisting Risk

Definition ∞ Delisting risk is the possibility that a digital asset or security will be removed from a trading platform or exchange. This risk arises when an asset fails to meet an exchange’s listing standards, such as minimum trading volume, liquidity requirements, or compliance with regulatory mandates. Delisting can significantly impair an asset’s market access and liquidity, potentially causing its value to decrease substantially. Regulatory actions or changes in an asset’s underlying project status often precipitate such events.
Context ∞ Delisting risk is a recurring concern for investors in the digital asset space, often triggered by regulatory uncertainty or project failures. Recent news frequently reports exchanges delisting tokens due to evolving compliance requirements or perceived securities law violations. This ongoing scrutiny highlights the importance of regulatory clarity and robust project development for asset longevity on trading platforms.