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LUNA: Binance delists LUNA and UST amid the collapse of a once $40B crypto empire

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TL;DR Breakdown
  • Binance announces the unlisting of LUNA and UST, as the Terra ecosystem plunges into crisis.
  • GAM Holdings, a Swiss asset manager, negotiates with Terra for a $3 billion bailout for its deteriorating ecosystem.
  • Terra’s co-founder’s wife asks for police protection as the coin collapses to zero.

Things are not improving for the Terra ecosystem, as Binance has now decided to delist LUNA and UST trading pairs. On 13 May 2022, Binance, the world’s largest cryptocurrency exchange by volume, announced that some margin and spot trading pairs would be removed.

LUNA’s dark days worsen as Binance delists it, and UST

After the collapse of the Terra Ecosystem, Binance jumps ship. The company also stated that it would terminate transactions, close user positions, execute an automated settlement, and cancel all pending orders at 00:40 GMT.

The company’s decision to delist the crypto pairs came as LUNA plummeted to zero, or $0.00001944 per coin, according to CoinGecko. The token has now officially lost 100%, as announced by the platform, with a total circulating supply of 6.5 trillion tokens.

Binance was also halting trading in the UST stablecoin, removing the following pairs: BTC/UST, LUNA/UST, ETH/UST, BNB/UST, and UST/USD. The company also canceled the BUSD-margined perpetual contract LUNA/BUSD.

Tether is still hanging in there, but barely. The previously third-largest stablecoin was a little over $0.168 at the moment of writing. However, according to industry analyst Colin Wu, it was a lot lower on some platforms.

GAM, Swiss asset manager, and Terra negotiate a $3 billion bailout 

The first worldwide behemoth to assist Terra and its crumbling ecosystem is the Swiss asset manager – GAM Holding AG. Following the project’s recent debacle, stakeholders have said that they will seek outside assistance. The Swiss asset manager – GAM Holding AG, was one of the first legacy financial firms to volunteer help.

According to a press release from the company, it has started negotiations with Terraform Labs to assist with its Luna stablecoin (UST). According to the entity, GAM anticipates investing between $2 billion and $3 billion in order to absorb extra UST supply while the price is falling. The UST peg would get restored as a result of the financial injection.

Our interest in supporting UST reflects our interest in supporting a vibrant, innovative, and resilient crypto market. We firmly believe in Terra’s ecosystem. Just as importantly, we believe in UST’s algorithmic approach to valuation. When investors have proper incentives, they naturally trade in ways that maintain price stability.

GAM CEO Peter Sanderson.

Also, on Friday, the Terra community released a new proposal to safeguard developers and users as the blockchain collapsed. The ‘LUNA Go Forward Proposal,’ calls for the creation and distribution of new LUNA to holders, stakers, and developers in order to protect them from the crisis.

The Terra Builders Alliance has established a Twitter profile to collaborate with the community and builders in determining the best course of action. A Discord account has also been created for community members to participate and discuss issues and solutions.

It also suggests halting blockchain verification in order to discuss the new currency’s distribution while the Terra blockchain remains halted. In reality, the Terra blockchain has been shut down twice in the past twelve hours. On the Terra forums, the notion seems to be gaining traction. But it’s too early to tell whether Terra’s leading developers will consider it.

Terrible times for Terra LUNA

Terra’s ecosystem has taken a beating. According to a report by South Korean business media outlet MoneyToday, Kwon Do-Hyung’s wife has filed a police complaint after an unknown individual broke into her apartment complex and rang the doorbell in the evening.

The unexpected visitor inquired if her husband was at home and then left. According to the article, Kwon’s spouse has requested that the police assign a person for emergency protection. According to the report, the residence address of the controversial entrepreneur remains known to unnamed investors in his cryptocurrency company.

After the collapse of Terra, suicide hotline numbers were attached to a prominent blockchain project’s subreddit. The community got filled with dire postings about losing everything in a single day. Reports are going out across Seoul advising individuals to contact authorities if they witness any suicide risks connected to the Terra failure.

The Terra validators pulled the plug (at least temporarily) on their beleaguered network late Thursday, New York time, as they looked for answers to a calamity that has destroyed UST and LUNA prices on-chain stability, and billions of dollars in wealth.

While the crypto industry braces for a “doomsday” crypto winter, the SEC’s “crypto mom” Hester Peirce has argued that regulatory “progress” in the stablecoin arena needs to provide room for error and trial and error. Peirce said she had urged the SEC to utilize its regulatory authorities to grant exemptions for certain technologies, arguing that this would allow for the necessary research.

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Florence Muchai

Florence Muchai

Florence is a crypto enthusiast and writer who loves to travel. As a digital nomad, she explores the transformative power of blockchain technology. Her writing reflects the limitless possibilities for humanity to connect and grow.

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