Binance CEO Changpeng Zhao disappointed with how Terra handled UST's collapse

advertisement

Binance CEO Changpeng Zhao has weighed in on the collapse of the stablecoin TerraUSD (UST) and its related token Luna (LUNA).

"I am very disappointed with how this UST/LUNA incident was handled (or not handled) by the Terra team. We requested their team to restore the network, burn the extra minted LUNA, and recover the UST peg. So far, we have not gotten any positive response, or much response at all," he said on Twitter.

Zhao also explained why Binance decided to freeze trading of both tokens.

"Some of our users, unaware of the large amounts of newly minted LUNA outside the exchange, started to buy LUNA again, without understanding that as soon as deposits are allowed, the price will likely crash further. Due to these significant risks, we suspended trading," he said.

The tokens collapsed when UST lost its peg to the US dollar, putting incredible pressure on Luna to keep its price up. Due to the way the two tokens were designed to interact, this led to a huge supply increase for Luna and a resultant price crash. Luna's supply increased from 340 million to 6.5 trillion in just a few days. At the same time, its price crashed from $60 to a fraction of a cent.

Trending Stories

Get Your Crypto
Daily Brief

Delivered daily, straight to your inbox.

Will Sanctions Drive Russia into the Arms of Cryptocurrencies?

From the removal of many Russian banks from SWIFT to a seemingly constant flow of new sanctions, Russia’s invasion of Ukraine has left many to wonder: Is the country likely to lurch towards cryptocurrencies? And if so, what does this mean for businesses that are holding and/or using crypto? Crypto and sanctions evasion Although crypto […]
Read Full Story
Sponsored Post

Layer-2 Scaling Solutions: A Framework for Comparison - Commissioned by Polygon

Ethereum had a breakout year in 2021. It’s native asset, ETH’s, market capitalization surpassed $500 billion for the first time. Its network facilitated upwards of $7 trillion value transfer. Non-fungible tokens (NFTs) emerged as another “killer application” that have put its technology on the global stage and caught the attention of the masses.
Read Full Story
May 5, 2022, 3:17PM UTC
More