Luna, UST Update: Binance CEO is Disappointed with How Luna and UST Price Collapse is Handled

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Crypto wallet and exchange Binance relists Terra’s cryptocurrency LUNA and stablecoin UST from its platform after suspending its trading on May 13 for its recent coin collapse. Binance CEO Changpeng “CZ” Zhao recently questioned the proposal of hard forking the Terra blockchain as a means to revive the once-thriving Terra (LUNA) and TerraUSD (UST) ecosystems. 

CZ said that hard forking to TERRA2 “won’t work” as it would involve providing a new version of LUNA to all holders.

“Reducing supply should be done via burn, not fork at an old date, and abandon everyone who tried to rescue the coin. I don’t own any LUNA or UST either. Just commenting,” CZ stated.

Rather, he suggested that Terra should first use its Bitcoin (BTC) reserves to buy back UST to revive the coin’s pegging. UST is an algorithmic stablecoin, a cryptocurrency that offers improved price stability without any collateral. (Read more: What are Algorithmic Stablecoins?)

Additionally, CZ pointed out the potential issues with forking Terra and noted that, “minting, forking, don’t create value.” Then the Binance CEO suggested an ideal way to revive the token’s value is to buy back and burn its supply.

Although the exchange was expressing support for the Terra community, the CEO emphasized the need for transparency.

He also added that “failures can/will happen. But when they do, transparency, speedy communication and owning responsibility to the community is extremely important.”

Recently, CZ expressed his disappointment in the way Terraform Labs handled the recent LUNA and UST collapse, as opposed to the way Axie Infinity recently handled its hacking crisis. He also noted that the team behind the Terra network hardly responded to Binance’s request to help them restore the network.

On Monday, the fund set up by Terra creator Do Kwon Luna Foundation Guard disclosed that it spent almost all of the bitcoin in its reserve last week in an attempt to save UST.

Currently the fund only has 313 bitcoins left in its reserve. (Approximately ₱487 million). The firm said it would use the remainder of its $85 million in crypto assets — including some BNB and avalanche — to “compensate remaining users” of UST.

“We are still debating through various distribution methods, updates to follow soon,” –Luna Foundation Guard

This article is published on BitPinas: Luna, UST Update: Binance’ CEO is Disappointed with How Luna and UST Price Collapse is Handled

Disclaimer: BitPinas articles and its external content are not financial advice. The team serves to deliver independent, unbiased news to provide information for Philippine-crypto and beyond.

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Shiela Bertillo

    BitPinas is the leading and most trusted blockchain and cryptocurrency news outlet that covers the Philippine blockchain and crypto scene. We are also writing general and international blockchain topics that are relevant to our audience.