Technology

Binance and 7 other exchanges remove LUNA and Terra USD from their platform

Key facts:
  • While some exchanges delist LUNA and TERRA USD, others remain silent.

  • BitMEX changed the funds that its users had in such cryptocurrencies to bitcoin.

Update: This article was updated in response to a new statement from Binance.


Various cryptocurrency exchanges have already announced the delisting of the LUNA and TERRA USD cryptocurrencies, both from the Terra project. A decision to which more platforms could join in view of the fact that their network has been paralyzed twice by their own validators.

Some of the exchanges that have already removed them are Crypto.com, OKX, PrimeXBTHuobi, WazirX, Bitget and BitMEX. Meanwhile, in others they are still being marketed, such as in FTX, Gate.io and KuCoin, since they have not released statements denying the service so far.

Binance, for example, had delisted them but re-listed them. From the company, they explained that they did this because the Terra blockchain validators have decided to resume block production, disable on-chain exchanges, and close IBC channels. Along these same lines, the LetsBit exchange communicated that LUNA and UST withdrawals will be restored when Terra network validators restart network activity.

Before reactivating the service on Binance, Changpeng Zhao, its founder and CEO, was one of the first to communicate that the platform would not accept any more trading of LUNA and TERRA USD. According to a series of tweets posted on their official account, they made the decision because the way the project has handled the entire situation has not been satisfactory to them.

Via Twitter, he expressed: “An exponential number of new LUNAs were minted due to flaws in the design of the Terra protocol. Their validators have suspended their entire network, resulting in no possible deposits or withdrawals to or from any exchange,” he said.

Zhao said that some of his users, unaware of the situation, started buying LUNA. This is without understanding that as soon as deposits are allowed, the price would likely plummet further, he said. Due to such risks, he estimated that they feel that suspending the trading of such cryptocurrencies is the best way to protect their users at this time.

Changpeng Zhao, CEO of Binance.
Changpeng Zhao (alias: CZ), the CEO of Binance, explained that he suspended the service of LUNA and TERRA USD to protect its users. Source: @cz_binance / Twitter.

On social networks, some traders commented that they had bought LUNA and UST after their extreme price drops. They made such a move thinking that her value would rise over time, without imagining that her network would be paralyzed. Others did them out of ignorance, since they did not know about this situation, according to explanations by Changpeng Zhao

The big question is what will happen to those people who still have funds from those cryptocurrencies in wallets or exchange houses. The reality is that it will depend on the resolution of each exchange. For example, BitMEX established that today the funds in LUNA or UST that its users had will be automatically converted to bitcoin (BTC).

Although it is worth clarifying that even before its network closed, such cryptocurrencies came to be worth almost zero, with which those who had money there lost practically everything. According to CoinMarketCap, LUNA is trading at $0.00002 and UST at $0.1, the latter normally pegged at 1:1 to the dollar. CriptoNoticias reported stories of some affected by this situation.

A disappointing ending

Binance CEO stated that they normally refrain from commenting on projects other than their own, but decided to break the rule for the Terra case. Although he clarified that the objective of his exchange is to be neutral with his users and peers in the industry, this time he gave his opinion on the matter.

“I am very disappointed in the way this UST/LUNA incident was handled (or not handled) by the Terra team. We asked your team to restore the network, burn the extra minted LUNA, and retrieve the UST pin. So far, we haven’t gotten any positive feedback, or much feedback at all,” he said.

He also clarified that Terra differs from what happened in Axie Infinitywhere the team took responsibility, had a plan, communicated with them proactively, and allowed them to help.

Another of those who spoke on the subject was Daniel Vogel, the founder and CEO of the Bitso exchange. The businessman commented to CriptoNoticias that on his platform they think a lot about the risks of cryptocurrencies, so they did not have UST. Precisely because they did not feel completely comfortable with how it maintained its peg to the dollar.

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