In the wake of the Terra “stable” cryptocurrency crisis this week, some of the world’s largest crypto exchanges have begun withdrawing it and its associated Luna token from trading. This action is necessary to protect users against risks.
Binance, the largest cryptocurrency exchange by trading volume and the most popular in the world, stopped the listing of Terra and Luna on Thursday. Soon after, the top ten OKXs in the world followed suit. However, other sites continued to trade and place assets.
Recall that on May 9, the Terra stablecoin, which was not backed by money, fell significantly below par, as a result of which the algorithm, designed to keep the price at $1 per “coin”, caused hyperinflation of the Luna cryptocurrency associated with it, which fell from $85 to $0.005 in a week. The Terra blockchain operators suspended their work and resumed it several times. This only increased investor panic and exacerbated the crisis. Transactions stop if the network doesn’t process new blocks.
That’s how you do it. Detailed explanationWhat happened? Changpeng Zhao, CEO of Binance: “Due to flaws in the architecture of the Terra protocol, new Luna tokens began to be issued at an exponential rate. The entire network has been suspended by validators, which means that funds cannot be deposited on any exchanges or withdrawn. [с площадок]. Some users have begun buying Luna again unaware that there are so many OTC Lunas being listed. We have stopped trading due to these serious risks..
Many other sites also reported instances of investor panic after the collapse in Terra. Crypto.com suspended trading in both of the collapsed cryptocurrencies and incorrectly priced the Luna token. The platform then reimbursed the affected users with its own CRO cryptocurrency, $10 each. Coinbase encountered a different problem. Terra users tried to withdraw their funds, but sent them in an unsuitable format. This resulted in the loss of funds. As a result, the platform published a warning that it supports working with Terra, but does not work with the “wrapper” of the Wormhole bridge.
The “shock wave” from the collapse of Terra has swept through the entire cryptocurrency market, where this week saw widespread losses and panic. The day before investors started to calm down. Bitcoin rose above $30,000, but it still fell below $27,000 The “honest”, money-backed and world’s largest stablecoin Tether, which briefly fell to $0.95, also got it: it quickly returned to nominal price, although it lost about $3 billion in turnover.