Major Exchanges Remove Terra Stablecoin From Listing As Price Crash Continues

As the Terra crisis continues, some of the world’s largest cryptocurrency exchanges have begun delisting Terra’s UST stablecoin and its related Luna token, citing the need to protect users from risk.

Binance, the largest cryptocurrency exchange by trading volume, stopped trading Luna and Terra Thursday. The OKX exchange – one of the top 10 by volume – did the same shortly after. The FTX exchange and other smaller exchanges continue to register and exchange Luna and UST tokens.

The write-offs come in response to a broader collapse of the Terra Project economy. After the UST stablecoin fell well below its dollar peg on May 9, an algorithmic process intended to balance the price near $1 triggered hyperinflation in the Luna token, causing its price to fall from $100 to below $100. 1 cent.

In response to the crisis, Terra blockchain operators have repeatedly stoppedso uninterrupted the network, compounding the frustration of investors in the project. (When a network is not processing new blocks, no transactions can be made with assets hosted on that blockchain.)

Binance CEO Changpeng Zhao has posted a Twitter feed explaining the reason for the suspension of the marketing of the Luna from the platform.

“An exponential number of new LUNAs have been manufactured due to flaws in the design of the Terra protocol. Their validators suspended their entire network resulting in no possible deposits or withdrawals to or from any exchange,” Zhao said.

“Some of our users, unaware of the large amounts of newly created LUNA outside the exchange, started buying LUNA again, not understanding that as soon as deposits are allowed, the price will probably fall further. Due to these significant risks, we have suspended trading,” he said.

Some exchanges have also been caught off guard by the frantic rush to withdraw money from users invested in the Terra project.

The exchange released a statement on Friday highlighting an incident in which users who traded Luna were quoted an incorrect price.

“All impacted trades (buying and selling) will be cancelled, and affected users will be credited with $10 in [ token] CRO for the inconvenience caused,” the statement read. also said all Luna trading would be halted until further notice, although a Twitter post from the exchange said users could withdraw the Luna token.

Elsewhere, another group of investors trying to get their money out of Terra ran into trouble sending UST to Coinbase exchange in unsupported format, resulting in a loss of funds. Since May 13, a advisory on the Coinbase site said the exchange supports UST but not UST in the wrapped Wormhole form.

Shockwaves from the Terra crash continue to ripple through cryptocurrency markets, which have experienced significant losses and panicked trading over the past week. But, as of Friday, there were signs that other cryptocurrencies might be insulated from Terra’s woes: Bitcoin prices rallied to $30,000 after failing to trade above $25,000 the day before.

Other stablecoins seem to have escaped Terra’s fate: Tether, the largest stablecoin by market cap, has regained its peg to the dollar after dropping as low as 95 cents on Thursday.

Abdul J. Gaspar