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{"id":5820,"date":"2022-05-14T15:05:53","date_gmt":"2022-05-14T15:05:53","guid":{"rendered":"https:\/\/scienceandnerds.com\/2022\/05\/14\/major-exchanges-delist-terra-stablecoin-as-price-collapse-continues\/"},"modified":"2022-05-14T15:05:55","modified_gmt":"2022-05-14T15:05:55","slug":"major-exchanges-delist-terra-stablecoin-as-price-collapse-continues","status":"publish","type":"post","link":"https:\/\/scienceandnerds.com\/2022\/05\/14\/major-exchanges-delist-terra-stablecoin-as-price-collapse-continues\/","title":{"rendered":"Major exchanges delist Terra stablecoin as price collapse continues"},"content":{"rendered":"

Source: https:\/\/www.theverge.com\/2022\/5\/13\/23070853\/crypto-exchanges-delist-terra-stablecoin-luna-binance<\/a>
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As the Terra crisis draws on, some of the largest cryptocurrency exchanges in the world have begun to delist Terra\u2019s UST stablecoin and its linked Luna token, citing a need to protect users from risk.<\/p>\n

Binance, the largest cryptocurrency exchange by trading volume, halted the trading of Luna and Terra<\/a> on Thursday. The OKX exchange \u2014 one of the top 10 by volume \u2014 took the same action<\/a> shortly afterward. The FTX exchange and other smaller exchanges continue to list and trade<\/a> the Luna and UST tokens.<\/p>\n

The delistings come in response to a broader collapse<\/a> in the economics of the Terra project. After the UST stablecoin fell well below its dollar peg on May 9th, an algorithmic process meant to balance the price at close to $1 triggered hyperinflation in the Luna token, crashing its price from $100 to less than 1 cent.<\/p>\n

In responding to the crisis, the operators of the Terra blockchain have repeatedly halted<\/a>, then unpaused<\/a> the network, compounding the frustration of investors in the project. (When a network is not processing new blocks, no transactions can be made with any assets hosted on that blockchain.)<\/p>\n

Binance CEO Changpeng Zhao posted a Twitter thread<\/a> explaining the rationale behind suspending trading of the Luna from the platform.<\/p>\n

\u201cAn 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,\u201d Zhao said.<\/p>\n

\u201cSome 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,\u201d he said.<\/p>\n

Some exchanges also have also been caught off-guard by the frantic scramble to cash out from users invested in the Terra project.<\/p>\n

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