Binance CEO “Very Disappointed” With How The Terra Team Handled The Luna And UST Incident

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thecryptobasic.com13d ago
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Binance CEO “Very Disappointed” With How The Terra Team Handled The Luna Incident.

Terra Luna seems to be antagonizing people from all corners of the crypto industry. Now, Binance CEO himself is speaking out against how the Terra Team (or Luna Foundation) handled the recent incident that sent the crypto into capitulation. As usual, CZ aired his views on Crypto Twitter.

“I am very disappointed with how this UST/LUNA incident was handled (or not handled) by the Terra team.”

5. I am very disappointed with how this UST/LUNA incident was handled (or not handled) by the Terra team. We requested their team to restore the network, burn the extra minted LUNA, and recover the UST peg. So far, we have not gotten any positive response, or much response at all — CZ 🔶 Binance (@cz_binance) May 13, 2022

 

Apparently, a huge number of LUNA was minted as a result of a critical flow in the Terra protocol. Due to this, validators suspended the entire network resulting in eliminating the possibility of withdrawals and deposits to and from any exchange.

2. An exponential amount of new LUNA were minted 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. — CZ 🔶 Binance (@cz_binance) May 13, 2022

 

As Users on Binance continued to buy Luna, unaware of the fact that a vast amount of Luna was minted, these users would be hit hard because the price would crash harder as the large amounts of newly minted coins enter exchanges. Binance suspended Luna trading to prevent this from happening. In essence, Binance took steps to protect investors.

3. Some of our users, unaware of the large amounts of newly minted LUNA outside the exchange, started to buy LUNA again, without understanding that as soon as deposits are allowed, the price will likely crash further. Due to these significant risks, we suspended trading. — CZ 🔶 Binance (@cz_binance) May 13, 2022

Not Like Other Teams

According to CZ, Binance was quick to notify the Terra team to restart the network and move to burn all the extra minted coins to prevent them from circulating and messing with the market. This would have worked to reinstate the UST peg with the USD. However, the Terra team did not heed this call.

“We requested their team to restore the network, burn the extra minted LUNA, and recover the UST peg. So far, we have not gotten any positive response, or much response at all.”

Suspension “Not An Easy Call”

CZ goes on to commend other teams like the Axie Infinity that took quick steps to secure their market when issues arrived. According to him, this particular team “took accountability, had a plan, and was proactive” in working with the exchange to prevent adverse effects.

“This is in sharp contrast to Axie Infinity, where the team took accountability, had a plan, and were communicating with us proactively. And we helped.”

The CEO admits that the decision to suspend Luna trading on the Binance exchange wasn’t an easy call to make. People’s funds were on the line. Still, some people aren’t happy with Binance. Some believe that the suspension came a bit too late when investors were already hurting. However, there’s a general consensus that it was the right call under the tough circumstances.

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