Binance Suspended UST, LUNA Withdrawals Due To Network Congestion

Binance suspended UST and Luna withdrawals because of network congestion while the UST stablecoin fell below its $1 peg and LUNA witnessed a sharp drop as well so let’s read more today in our latest Binance news.

As the crypto community tries to find out what terra’s ongoing depegging fiasco will bring as a consequence, the major crypto exchange Binance suspended UST and Luna withdrawals until furhter notice, as was announced on Tuesday. The market value of UST, Terra’s stablecoin offering fell below its expected $1 peg and LUNA experienced a sharp drop as well. At the same time, the BTC/UST trading par on Binance reached a new high of more than $42,000 while other BTC dollar markets struggled to preserve the $30,000 level.

Withdrawals on Terra Network $LUNA temporarily suspended.https://t.co/hIGrAEzOwD

— Binance (@binance) May 10, 2022

As a measure against the uncertainy within the Terra ecosystem, Binance suspended all withdrawals for LUNA and UST tokens citing a high volume of pending withdrawal transactions. As per Binance, the high volume of pending UST transactions happened due to network slowness and congestion. While acknowledging the possible inconvenience to the investors, binance stated:

“Binance will reopen withdrawals for these tokens once we deem the network to be stable and the volume of pending withdrawals has reduced. We will not notify users in a further announcement.”

Hmm… reminds me a lot of our shitty legacy financial system. https://t.co/yF11hj4i5N

— Ergo Whale (@ergo_whale) May 10, 2022

Crypto twitter reacted to the Binance announcement by questioning the inherent value of decentralization which the community stands for and compare the move to a centralized approach that is usually sported by traditional finance. Users around the world often get barred from withdrawing their own funds and the community reiterated the phrase “not your kes not your coins” and outlined Binance’s fund’s suspension as one of the biggest cons of a centralized exchange.

I have not followed LUNA/UST ecosystem or community discourse much BUT at a founder to founder level, I can feel for @stablekwon

He is at the epicentre of this industry wide event, handling so much pressure & responsibility at such a young age.
Good luck to him & Luna community!

— Sandeep – Use Stripe on Polygon 💜 (@sandeepnailwal) May 10, 2022

On the other hand, some members of the community supported the move and stated that Binance’s CEO Changpeng Zhao helped a lot of investors from liquidating themselves by selling a stablecoin at $0.7. while Terra continues to find a new solution to the dropping value of UST, plenty of entrepreneurs including Polygon co-founders show support for the co-founder of CEO of Terraform, Do Kwon. UST flipped Binance USD to become the third biggest stablecoin on the market after Tether and USDC based on the market cap. The reports based on data collected from Coingecko show that UST’s total market cap surged 15% over the past 30 days to sit at $17.5 billion which was higher than BUSD’s market cap of $17..46 billion.