Binance has temporarily suspended withdrawals of $LUNA and $UST. The two digital coins operate on the Terra network, which has lately experienced overload and slowness. As a result, the values of LUNA and UST have plummeted, with losses of 53 percent and 15.5 percent.

Terra has been building up its Bitcoin reserves to safeguard its algorithmic stablecoin, UST, which is currently worth $16 billion. However, after losing its peg to the gloomy cryptocurrency market, the network has been in free collapse. The stablecoin is selling at $0.87, down 13% from its psychological price of $1.

Binance published a press statement in response to this revelation, essentially suspending all LUNA and UST token withdrawals as of May 10, 2022, at 02:0 AM (UTC). According to the statement, the suspension was attributed to a significant amount of pending withdrawal transactions caused by network slowness and congestion.

Binance published a press statement in response to this revelation, essentially suspending all LUNA and UST token withdrawals as of May 10, 2022, at 02:0 AM (UTC). According to the statement, the suspension was attributed to a significant amount of pending withdrawal transactions caused by network slowness and congestion.

Bitcoin lại giảm, LUNA bị dump và UST mất peg 1 USD - Coin68

There was no indication of when the ban will be lifted. Instead, the exchange said that the block will be lifted after the network had stabilized and the number of pending withdrawals had decreased. The message also pledged to keep consumers informed of any new developments and finished with an apology for the inconvenience.

LUNA and UST users reacted angrily to Binance’s decision to suspend withdrawals. Advocates and industry participants slammed it, stating that it isn’t really decentralized since a single body executes open market operations.

Do Kwon, the CEO of Terraform Labs said that the transaction was a coordinated assault against the protocol. The Luna Foundation Guard (LFG) council is not aiming to abandon its Bitcoin stake by shifting $1.4 billion in BTC and UST; rather, it is placing money in the hands of a professional market maker to reinforce the algorithmic stablecoin’s peg, he said.

As a result, investor mood fell, with the large decrease cementing a negative sense among LUNA and UST investors as Terra failed to maintain the peg.

Samuel Bankman-Fried, the CEO of the FTX exchange, echoed similar comments in March. Market collapses, he warned, would result from restrictions on risky assets. IRON, the stablecoin launched by Iron Finance, fell to zero as predicted, making UST the second stablecoin to crash.

Binance Exchange has subsequently issued a warning to consumers about the volatile nature of digital assets and urged users to invest prudently.

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