The CEO of Binance proposes a solution to Project Terra and explains why it has stopped trading on Binance
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Answer The CEO of Binance proposes a solution to Project Terra and explains why it has stopped trading on Binance
The CEO of one of the world’s largest cryptocurrency exchanges gave his opinion on the status of UST and explained the reason for suspending trading of LUNA and UST from Binance.
Above all, the main issue affecting the UST stablecoin peg is the excessive amount of LUNA minted due to the underlying issues with the Terra protocol.
5. I am very disappointed with the way the ground floor tanks/LUNA incident was handled (or not addressed) by the Terra team. We asked their team to restore the grid, burn the extra LUNA minted, and restore the connection to the floor cabinets. So far, we haven’t had any positive response, or great response at all
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– CZ 🔶 Binance (cz_binance) May 13, 2022
In the wake of the turmoil in Terra markets, auditors suspended the entire network, essentially shutting down all essential network functions.
No withdrawals or deposits were possible from that moment on.
According to CZ, large amounts of LUNA were minted and moved out of the trading platforms that halted deposits, which is why some users thought selling pressure was easing and they could buy some LUNA in order to adjust their positions.
But the main issue was that as deposits opened, selling pressure would return to the markets, causing a steady decline.
CZ added that he was disappointed with the handling of the situation by the management of UST and LUNA.
Binance requested to restart the network, burn the excess LUNA coins, and restore the link, but Binance was unable to receive any response from Terra.
CZ also added that other companies and projects such as Axie Infinity acted professionally in situations similar to UST where they took responsibility and presented a plan that led to immediate action on their part as well as assistance from Binance.
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At press time, Luna and UST withdrawals and deposits are banned on Binance, as the currency’s stability remains in doubt after Luna hit $0.00001, which is a 100% drop from the price we saw just a week ago.
Currently, the UST stablecoin is still struggling and trying to reach $1 and is currently trading at $0.16.
In a new update, Binance announced that it has resumed trading of LUNA and UST on Binance after being suspended for a period of time.
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