A worldwide cryptocurrency exchange Binance has stopped trading pairs with the Terra ecosystem’s cryptocurrencies, LUNA and TerraUSD, after the disastrous plunge of the algorithmic stablecoin (UST).
On May 13, Binance announced the suspension of spot trading for the LUNA/BUSD and UST/BUSD trading pairs. It’s unclear when LUNA and UST withdrawals would begin, as the cryptocurrency exchange just said that it will wait for Terra network issues to be rectified before continuing.
It is the latest action by the world’s largest cryptocurrency exchange by trading volume, after one of the most significant black swan events to influence the sector since the inception of Bitcoin (BTC) in 2009.
Binance Futures delisted coin-margined LUNA perpetual futures on Thursday, despite pledges to salvage the failing LUNA and UST. Following the failure of the Terra blockchain’s LUNA currency, validators were forced to shut down the network on May 12 to avoid any governance attacks.
Terra’s LUNA and its algorithmic stablecoin Terra USD plummeted drastically on May 10 when UST lost its $1 peg. The mechanism was supposed to automatically maintain its peg to the US dollar, but it failed, leading the UST to plummet and LUNA tokens to be issued at an extraordinary rate.
The crash was disastrous, with the value of LUNA dropping by 95% in a week. Do Kwon, the designer of Terra has released a short-term plan to aid in the recovery of the environment. To prevent the UST $1 peg from weakening, the proposal planned for burning $1.4 billion UST and staking 240 million LUNA tokens.
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