Changpeng Zhao (CZ), CEO of leading crypto exchange Binance has expressed disappointment at how the Terra (LUNA) project team has so far handled the price crash of its stablecoin, UST and its native token, LUNA.
5. 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
— CZ 🔶 Binance (@cz_binance) May 13, 2022
Following a bloodbath in the crypto market this week, Terra’s stablecoin, which is meant to be pegged to the U.S. dollar, lost its peg, thereby failing to maintain a 1-to-1 value. On Wednesday, UST went down as low as 26 cents. At the same time, the platform’s native token, Luna also plunged, falling from around $100 to well under $0.01.
To stabilize the price of these tokens, the Terra foundation minted and burned huge amounts of them. CZ noted that Binance decided to suspend UST and Luna trading on its platform due to such a move to protect customers from potential risk.
The Binance CEO noted that users who were 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.”
In a surprising turn of events, Binance said in another update that it would relist spot trading pairs for LUNA and UST. Perhaps the relisting suggests that Binance has communicated with the Terra team or community leaders regarding a possible solution.
Binance will resume spot trading for the following trading pairs at 2:00pm UTC, May 13 2022.
— Binance (@binance) May 13, 2022
At the time of writing, UST is currently down by 67.12% in the last 24 hours, trading at $0.1785. Luna plunged 99.9% in the last 24 hours, currently trading at $0.0000354.
Terra (LUNA) death spiral continues
The fall of the Terra (LUNA) project has continued despite an earlier UST repeg plan unveiled by troubled TerraForm Labs CEO Do Kwon. Efforts to mint increased amounts of LUNA to regain the UST peg have proved abortive. At the same time, ongoing proposals including a coordinated restructuring of the project remain under consideration.