Home Trading Binance Loses $1.6 Billion On Its LUNA Investment, CZ Wants Smaller UST...

Binance Loses $1.6 Billion On Its LUNA Investment, CZ Wants Smaller UST Holders To Be Compensated First – CoinCheckup Blog

25
0


Key takeaways:

  • According to Binance CEO Changpeng “CZ” Zhao, Binance received 15M LUNA as a part of its original $3 million investment in Terra
  • At its peak, Binance’s LUNA investment was worth over $1.6 billion (at press time, about $3,000 worth) 
  • Binance’s CEO wants to see smaller wallets being prioritized in the compensation process

Binance made 560x on its LUNA investment, then lost it all in the Terra market crash

The collapse of the Terra ecosystem has left many investors down huge sums of money. LUNA, which at one point traded as high as $119, is now worth just one-hundredth of a penny. Retail investors were far from being the only ones affected by the downfall of the once second largest DeFi ecosystem and the third largest stablecoin.

On Monday, Changpeng “CZ” Zhao, the CEO of the world’s largest cryptocurrency trading platform Binance, stated that the exchange recorded a loss of more than one billion dollars holding LUNA and UST. 

According to the CEO, Binance received 15 million LUNA for its $3 million investment in Terra. At their peak, the total value of Binance’s LUNA tokens surpassed $1.6 billion. If Binance sold its LUNA at the ATH, it would had made 560x returns on its initial investment. However, as Zhao noted, the tokens were “never moved or sold,” meaning that the company’s multi-million investment dwindled down to just $3,000.

In a Twitter thread, Zhao clarified that Binance earned 12 million UST from staking over the years and that the exchange earned nothing from UST transactions and trades, as most UST trading pairs had no fees.

Binance’s CEO expressed his stance that Binance, despite incurring a significant loss in the Terra downfall, would like to see the “Terra project team to compensate the retails users first, Binance last, if ever.” Zhao wrote this in response to a Twitter user calling for Terra’s $1.5 billion fund to be used to compensate smaller wallets. The user going by the Twitter handle “PersianCapital” wrote

“The second way is to prioritize smaller wallets. People who had a couple thousand or more of UST deposited in Anchor. If Terra just focussed on the “poorest” 99.6% of wallets, then they could make this gigantic group 100% whole.“

In addition to Zhao, the proposal received support from some of the crypto’s most notable figures, including Ethereum co-creator Vitalik Buterin and TRON founder Justin Sun. 



Previous articlePoker and Cryptocurrency: The Similarties and Relationship Between The Two
Next articleAfter Terra’s UST, This Stablecoin Loses it’s Peg.What’s The Future Of Stablecoins? – Coinpedia – Fintech & Cryptocurreny News Media