Binance, the world’s biggest cryptocurrency, has confirmed that it will shut down the trading of UST and LUNA. The CEO of the exchange, Changpeng Zhao, took to Twitter to announce this decision and also talked about the volatility of these tokens and the reason why the exchange suspended the trading of the coins.
Binance removes LUNA and UST trading
In a series of Twitter posts, Zhao said that the priority of Binance is to protect investors and hence, has suspended LUNA and UST trading following the huge volatility in the price action of the two cryptocurrencies.
“An exponential amount of new LUNA were minted due to flaws in the design of the Terra protocol. Their validators have suspended their entire network, resulting in no deposits or withdrawals possible to or from any exchange,” said Zhao. “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.”
1. At #Binance we prioritize user protection. We made the decision to suspend LUNA and UST trading. Here's why.
A thread 👇
— CZ 🔶 Binance (@cz_binance) May 13, 2022
Zhao further added that he is disappointed with how this UST/LUNA incident was handled, and it is in very sharp contrast to the Ronin Bridge attack on Axie Infinity, wherein the team had plans to restore the network and asked Binance for help which the firm provided.
“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,” CZ said.
While this decision by the world’s biggest cryptocurrency exchange divided the crypto community, the Terra team has introduced three steps to rebuild the protocol and re-peg the stablecoin UST. On the other hand, many LUNA holders have lost their investments completely.