The LUNA cryptocurrency and practically its entire ecosystem collapsed in a catastrophic manner over the past few days, eventually causing major damage to the market. Certainly, many are disappointed and upset by the cryptocurrency, including Binance’s CEO.
During the week, TerraUSD lost its ballast against the dollar, causing the Terra ecosystem’s cryptocurrency, LUNA, to plummet by more than 98% and trigger a market panic, triggering its most recent decline, among other things.
TerraUSD/LUNA still surprised a lot of people because it showed no signs that it was a totally flawed project and that it could collapse within hours. Many have already drawn attention to how much the hype why it was exaggerated and how many influencers there were promoting cryptocurrency which is always a sign we should keep an eye on.
This “surprise” caused extensive damage and even required that Changpeng Zhao to comment on the situation and Binance’s stance in this regard. In a Twitter thread, CZ explained that the broker’s priority is customer protection and therefore LUNA and UST would be removed from the platform.
“At Binance, we prioritize user protection. We have made the decision to suspend trading in LUNA and UST.”
1. At #Binance we prioritize user protection. We have made the decision to suspend trading in LUNA and UST. This is why.
The wire
— CZ 🔶 Binance (@cz_binance) May 13, 2022
In the tweets, CZ also explained that Luna was not only harming Binance customers with the sudden price drop, but also because of issues with their validators that ended up cheating investors and hurting them even more.
According to him, a large amount of Luna was mined, but investors could not know that before they fell into a price trap.
“An exponential amount of LUNA has been created due to mistakes in Terra protocol design. Your validators have suspended the entire network, pausing deposits and withdrawals. Some of our users, unaware of the amount of newly mined LUNA, started to buy LUNA again, when the depots started working again, the price dropped even further.”
Due to this huge risk to its clients, Binance has decided to remove LUNA and UST from its operations. CZ even indicates that it is disappointed with the way the LUNA team has handled the whole situation.
“I am very disappointed with the way this UST/LUNA incident was managed (or not) by the Terra team. We asked the team to restore the net, burn the extra mined LUNA and recover the ballast from the UST. So far we haven’t had a positive response, or any other kind of response.”
With the catastrophic price drop and Binance taking coins out of its trading book, it’s pretty hard to believe that LUNA will ever be able to recover.
Source: Live Coins
John Cameron is a journalist at The Nation View specializing in world news and current events, particularly in international politics and diplomacy. With expertise in international relations, he covers a range of topics including conflicts, politics and economic trends.
