Changpeng Zhao, the CEO of the Binance platform, stepped out of his usual neutrality and did not hesitate to criticize Terra’s (LUNA) teams’ catastrophic management strategy. In addition, spot trading of UST/BUSD and LUNA/BUSD pairs was temporarily suspended for part of the afternoon.
Binance halts trading of UST and LUNA
In the early afternoon, Binance CEO Changpeng Zhao tweeted to provide an update on the dramatic situation regarding the Terra (LUNA) ecosystem. Among other things, it says that the UST/BUSD and LUNA/BUSD trading pairs have been suspended.
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
Changpeng Zhao mentions a first problem: an exponential number of LUNA tokens were created (minted) following the depeg (loss of benchmark value) of the UST, which mechanically caused a drop in its value on the market.
This is the reason why the 2 crypto currencies are dragging each other down into a bottomless pit: LUNA will continue to lose value until UST regains its $1 value.
All in all, over the course of a week, the number of LUNA tokens in circulation increased by +49,293%.
Number of LUNA tokens in circulation from May 7 to today
However, as Changpeng Zhao points out, not all users may be aware that LUNA is currently on a downward spiral. So, in order to limit the damage, trading of these 2 assets has been suspended on the world’s largest cryptocurrency platform.
But this was short-lived: a few hours later, an announcement was made to warn that trading of these pairs will be restored at 4:30 pm. A rather significant contradiction between the CEO’s statement and that of the platform therefore, especially insofar as no further clarification has been made.
Terra’s strategy strongly criticized by CZ
The CEO of Binance, through this tweet, did not fail to make known what he thought of the strategy (or precisely its absence) of the Terra team.
Binance is said to have contacted the developers of the blockchain in order to propose solutions for reinstating the dollar peg on the UST:
“I’m not sure what to do about it.
“I am very disappointed with the way this UST/LUNA incident was handled (or not) by the Terra team. We have asked their team to restore the network, burn the excess LUNAs and recover the UST peg. So far, we have had no positive response, or no response at all. “
He then drew parallels with Axie Infinity, whose Ronin sidechain was hacked for $620 million recently. At the time, CZ praised the communication and accountability of the teams in charge of the project, which suffered one of the largest hacks in cryptocurrency history.
“It’s a stark contrast to Axie Infinity, where the team took responsibility, had a plan, and was proactively communicating with us. And we helped. “
For their part, Terra’s teams are providing very little news, let alone Do Kwon, Terra’s founder, who has been off the radar since May 11.
