With the onset of the Terra crisis, some of the world’s largest cryptocurrency exchanges have begun to remove Terra’s stable UST coin and the associated Luna token, citing the need to protect consumers from risk.
Binance, the largest cryptocurrency exchange by trading volume, stopped the trade of Luna and Terra in Thursday. The OKX exchange – one of the top 10 in volume – take the same action shortly after. The FTX exchange and other smaller exchanges keep listing and trading Luna and UST tokens.
The write-offs come in response to a wider collapse in the Terra project’s economy. After the UST stablecoin fell well below its fixed dollar on May 9, an algorithmic process designed to balance the price at close to $ 1 caused hyperinflation in the Luna token, dropping its price from $ 100 to less than 1 cent.
In response to the crisis, blockchain operators Terra repeatedly stoppedthen restored to pause network, which complicates the frustration of investors in the project. (When the network does not process new blocks, transactions with assets hosted on this blockchain cannot be performed.)
Binance CEO Changpen Zhao published a Twitter topic explains the reason for stopping trading with Luna from the platform.
“A huge number of new LUNAs have been cut down due to design flaws in the Terra protocol. “Their validators have shut down their entire network, making it impossible to make deposits or withdrawals to or from any exchange,” Zhao said.
“Some of our consumers, unaware of the large quantities of newly minted LUNA off the stock exchange, started buying LUNA again, not realizing that as soon as the deposits are allowed, the price will probably fall further. “Because of these significant risks, we have stopped trade,” he said.
Some exchanges were also caught unprepared by the frantic struggle to withdraw money from consumers invested in the Terra project.
The Crypto.com exchange issued a statement on Friday, highlighting an incident in which users trading with Luna were quoted incorrectly.
“All affected transactions (buying and selling) will be canceled and affected users will be credited 10 USD in [Crypto.com token] CRO for the inconvenience, “the statement said. Crypto.com also said that all trading in Luna will be suspended until the next order, although a Twitter post on the stock exchange states that users can download the Luna token.
Elsewhere, another group of investors trying to move their money from Terra ran into problems sending UST to Coinbase in an unsupported formatwhich leads to lost funds. From May 13 an advisory the Coinbase website says the exchange supports UST, but not UST in Wormhole format.
The shockwaves of the Terra disaster continue to stir in the cryptocurrency markets that have suffered significant losses and panicked trade over the past week. But as of Friday, there were signs that other cryptocurrencies could be isolated from Terra’s woes: bitcoin prices rose to $ 30,000 after failing to trade more than $ 25,000 the day before.
Other stablecoins seem to have escaped the fate of Terra: Tether, the largest stablecoin by market capitalization, has he regained his commitment to the dollar after falling to 95 cents on Thursday.