Binance CEO disappointed with Terra’s reaction to recent crypto crash

Changpeng Zhao, CEO of Binance, has expressed dissatisfaction with Terra’s handling of the demise of its native crypto asset Luna and its stablecoin TerraUSD (UST). Zhao told his six million Twitter followers in a lengthy thread that Binance reached out to the folks behind Terra and gave advice on how to reduce the problem, while also hinting to how the Terra network’s crew scarcely reacted to Binance’s plea to assist them repair the network.

“While Binance always aims to be neutral, helpful and protective of all users and industry peers, and we typically refrain from commenting on other projects, I will break that rule this time,” tweeted CZ.

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

“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. This is in sharp contrast to Axie Infinity — referring to the $625 million (roughly Rs. 4,865 crore) hack in March 2021 — where the team took accountability, had a plan, and were communicating with us proactively. And we helped,” added Zhao in subsequent tweets.

Binance briefly suspended LUNA and TerraUSD trade using their own stablecoin Binance USD shortly after Terra’s price collapsed to $0 on May 13. (BUSD).

6. (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.)

— CZ 🔶 Binance (@cz_binance) May 13, 2022

Zhao also spoke about the reasons that drove the crypto exchange to halt the trading of LUNA and UST, “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,” he explains.

“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.”

Hours later, Binance decided to resume trading activities involving LUNA and UST. According to Zhao, the move enables their users to convert their LUNA or UST to other digital assets.

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