Changpeng Zhao, better known as CZ, is the founder and CEO of Binance. Speaking from his own Twitter account, he explained why he decided to remove LUNA and UST from Binance.
TerraUSD (commonly known as UST) and LUNA are the two most popular stablecoins in the cryptocurrency community, with UST relying on LUNA.
Stablecoins are often used to avoid extreme volatility, which is a prevalent feature of the crypto market, by preserving relative price stability through the use of collaterals (fiat or cryptocurrency) or algorithms.
Following a massive drop in the crypto industry, which saw LUNA depegged, Binance suspended all kinds of LUNA and UST trading on its site.
Several issues have been raised over the abrupt drop in the value of LUNA and why Binance delisted it from its platform. Changpeng Zhao, or CZ as he is most often known, turned to Twitter to explain his choice. The decision was made in accordance with Binance’s policy of protecting users in the case of high volatility.
He said that there was a fault in Terra’s protocols, therefore the decision was made to prohibit Binance customers from purchasing newly minted LUNA, which would have most certainly resulted in an account crash.
He voiced his rage and displeasure when he deviated from Binance’s impartial stance and chastised the Terra team for their carelessness of duty and failing to respond to Binance. He referenced a recent situation and praised their quick response and collaboration with Binance before promising to keep a close watch on matters and keep users updated on any and all developments.
Following the failures of UST and LUNA, Terra blockchain declared its closure in the early hours of Friday, May 13, 2022. The downtime was also stated in the tweet to allow the validators to come up with a plan of reconstitution, and while the strategy is still unknown, there is a promise of updates.