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Major crypto exchanges delist Terra stablecoin as it continues to lose value

Crypto continues to burn investors, and the latest one to flop is Terra which has been delisted because the price won’t stop falling.

There doesn’t seem to be a way out for Terra, as the largest crypto exchanges have been delisting its UST stablecoin and its associated Luna token. The move to delist was meant to protect users from risks.

Luna and Terra got delisted by Binance first. As the largest crypto trading platform, Binance’s action was going to create a ripple, and other crypto exchanges quickly followed suit. The OKX exchange towed the same thread just hours later. However, smaller crypto exchanges like the FTX continue to process the Luna and UST tokens.

The embattled Terra project’s UST stablecoin dipped below a dollar on May 9th. This triggered a mechanism meant to balance the price, leading to hyperinflation in the Luna token, which suffered a crash from $100 to below a cent.

The Terra project handlers halted and continued the network multiple times to arrest the situation, causing more frustration for the people who made investments as transactions became impossible.

Binance CEO Changpeng Zhao tweeted why his company decided to delist Luna. “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.

“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.”

Meanwhile, some exchanges have not been able to react fast enough to the frantic dash to cash out by Terra investors. Also, lots of chaos has ensued in the flurry of activities. For example, released a statement describing an incident in which Luna traders got the wrong price quotes. The exchange has promised to reimburse affected users with $10. It also said it would pause Luna trading till further notice and may even withdraw the token.

Another set of investors lost their funds while trying to take their money out of Terra. They sent their UST to Coinbase using an unsupported format.

However, the crisis facing Terra does not seem to be affecting other cryptos. For instance, Bitcoin has climbed to $30,000, gaining about $5,000 in a single day of trading. Other stablecoins were able to recover after dropping below their dollar peg, including Tether.

Written by HackerVibes

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