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

Upgrade: This article was updated due to a new statement from Binance.

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

Some of the exchanges that have already eliminated them are Crypto.com, OKX, PrimeXBT, Huobi, WazirX, Bitget and BitMEX. Meanwhile, in others they are still being traded, such as in FTX, Gate.io and KuCoin, in view of the fact that they have not released statements denying the service so far.

Binance, for example, had removed them from the list, but integrated them again. From the company, they explained that they did this because Terra’s blockchain validators have decided to resume block production, disable on-chain exchanges and close IBC channels. In the same vein, the LetsBit exchange communicate that the withdrawals of LUNA and UST will be restored when the validators of the Terra network restart the 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 no longer accept LUNA and TERRA USD trading. According to a series of tweets published on their official account, they made the decision because the way the project has handled the whole situation has not been satisfactory to them.

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

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Zhao commented that some of his users, unaware of the situation, began to buy LUNA. This without understanding that as soon as deposits are allowed, the price would probably plummet even more, he indicated. Because of such risks, he estimated that they feel that suspending the trading of such cryptocurrencies is the best way to protect their users at the moment.

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

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 became worth almost zero, with which those who had money there lost practically everything. According to CoinMarketCap, LUNA trades at USD 0.00002 and UST at USD 0.1, the latter normally had 1:1 parity with the dollar. CriptoNoticias reported stories of some affected by this situation.

A disappointing outcome

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

“I am very disappointed with the way this UST/LUNA incident was handled (or not handled) by the Terra team. We requested your team to restore the network, burn the extra minted LUNA and recover the UST plug. So far, we have not received any positive response, or much response at all,” he said.

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

Another of those who spoke on the topic was Daniel Vogel, the founder and CEO of the Bitso exchange. The businessman told CriptoNeticias that on his platform they think a lot about the risks of cryptocurrencies, so they had no UST. Precisely because they were not completely comfortable with how it maintained its parity to the dollar.