Binance CEO Changpeng Zhao disappointed with how Terra handled UST's collapse

Binance CEO Changpeng Zhao has weighed in on the collapse of the stablecoin TerraUSD (UST) and its related token Luna (LUNA).

"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," he said on Twitter.


Keep up with the latest news, trends, charts and views on crypto and DeFi with a new biweekly newsletter from The Block's Frank Chaparro

By signing-up you agree to our Terms of Service and Privacy Policy
By signing-up you agree to our Terms of Service and Privacy Policy

Zhao also explained why Binance decided to freeze trading of both tokens.

"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," he said.

The tokens collapsed when UST lost its peg to the US dollar, putting incredible pressure on Luna to keep its price up. Due to the way the two tokens were designed to interact, this led to a huge supply increase for Luna and a resultant price crash. Luna's supply increased from 340 million to 6.5 trillion in just a few days. At the same time, its price crashed from $60 to a fraction of a cent.

About Author

Tim is the Editor-In-Chief of The Block. Prior to joining The Block, Tim was a news editor at Decrypt. He has earned a bachelor's degree in philosophy from the University of York and studied news journalism at Press Association Training. Follow him on X @Timccopeland.