[DigitalToday reporter Jinju Hong (홍진주)] Global cryptocurrency exchange Kraken has started automatically selling remaining user assets in seven delisted tokens. With users unable to withdraw or dispose of the assets themselves, concerns are rising that thin liquidity could force liquidation at prices below expectations.

On Aug. 3 (local time), blockchain outlet CryptoSlate reported that Kraken will automatically sell remaining spot balances in the seven delisted tokens from that day through Aug. 7, depending on market conditions.

The assets are PLANCK, AIR, MICHI, FLY, ANLOG, TERM and STRD. Kraken ended withdrawals for the assets as of 2 p.m. UTC on July 31 and then began an exchange-led liquidation process for remaining balances.

The move is different from liquidating leveraged positions or issuing margin calls. It is the final step in winding down users’ spot assets after delisting, with Kraken selling and then paying users the proceeds.

Kraken previously announced in April it would delist the seven assets and proceeded with a phased shutdown. It halted trading and deposits from May 1 and, after a grace period of about three months, ended the withdrawal function as well.

The issue is low liquidity in some tokens. Kraken warned in a notice that some assets trade in limited markets or are effectively inactive. It said automatic sales could execute at prices far below recently displayed prices, and that if liquidity is insufficient, there may be little or no proceeds left from the sale.

Kraken did not, however, state that all users will necessarily incur losses or that balances will become worth 0 won. Trading conditions for some of the tokens are poor. CoinGecko data showed that as of Aug. 2, PLANCK's 24-hour trading volume in some markets was only about $591. It also showed very limited displayed liquidity within a two-way 2 percent range in a Uniswap V3 BNB Chain pool. The figures reflect certain trading conditions at a specific point in time, and Kraken has not disclosed which trading routes it will use in the liquidation process.

It is also difficult to predict in advance how much users will receive back. Kraken said the display currency of sale proceeds may vary depending on market conditions, and that it cannot guarantee or confirm amounts in advance.

It also did not disclose which exchanges or liquidity pools will be used for sales, nor the order of liquidation by asset and the applicable fees and spreads. It likewise did not present separate standards for minimum balances or handling of small remaining amounts.

The move means users holding the tokens have lost the chance to sell or withdraw directly and will go through a forced conversion process on a schedule set by the exchange. The liquidation period runs through Aug. 7, but the actual returned amount and payment currency are expected to be confirmed only after all sales are completed. The market is paying attention to the case as an example of the risks that holders of low-liquidity tokens can face after delisting.