Binance, one of the biggest exchanges in the world, decided that it will delist its Tether (USDT)-margined Terra (LUNA) futures contracts, following a more than 99% price drop.
In a blog post published on Thursday, Binance stated that it would be taking “precautionary measures” regarding its LUNA/USDT perpetual contracts, planning to delist the pair if its price falls below 0.005 USDT. This announcement came after the exchange changed the leverage and margin tiers for the LUNA-tied contracts on Wednesday, setting the maximum leverage for positions under 50,000 at eight times.
As mentioned previously, Binance Futures will conduct an automatic settlement on the $LUNA USDT-Margined Contract and then delist the Futures contract at May 12, 2022 3:30pm UTC.https://t.co/774JF0HcqP
— Binance (@binance) May 12, 2022
Furthermore, Binance said on Thursday that it would launch Binance USD (BUSD)-margined LUNA futures contracts as an alternative investment vehicle if it delisted LUNA/USDT. According to the exchange, there has been “slowness and congestion,” which has resulted in a large number of Terra network withdrawal transactions being marked as pending.
In the last 24 hours, the LUNA price has dropped by over 98%, and it is currently trading at $0.004 after a massive sell-off. The volatility has affected many tokens in the crypto market, with Bitcoin (BTC) falling below $27,000 to a 16-month low and Ether (ETH) dropping below $2,000 for the first time since July 2021.
LUNA/USDT price movement. Source: TradingView
Amid extreme market volatility, many exchanges have addressed FUD rumours about user funds circulating on social media. On Wednesday, Celsius Network CEO Alex Mashinsky tweeted to his followers that the platform “has not experienced any significant losses and all funds are safe.” Similarly, Coinbase CEO Brian Armstrong assured the exchange users that the company faces “no risk of bankruptcy.”
Do Kwon, co-founder of Terra, hinted at a “rescue strategy” for TerraUSD (UST) on Tuesday, adding later that he supported community requests to raise the algorithmic stablecoin’s minting capacity. On the other hand, Kwon hasn’t given any updates since LUNA’s latest price decline.
