CZ Vows to Protect Users After Detailing $UST Holdings

CZ is putting LUNA on notice to do the right thing and support its users after the catastrophic drop in value.

Sobering LUNA Thoughts

Binance CEO, Changpeng Zhao, offered an insight into how Binance is taking measures to ensure that its users are protected in light of the Terra Luna debacle. 

In a series of tweets posted on May 16th, CZ detailed Binance’s exposure to the LUNA project and their planned approach to ensuring users who have seen their investments practically wiped out are made whole. In total, CZ admits to Binance holding 15,000,000 LUNA which at its peak was worth approximately $1.6 billion USD. The LUNA was given to Binance in exchange for an original investment Binance made into the project for $3M. This amounts to a 560x return – not a bad trade off if it wasn’t for the catastrophic drop wiping out the return. CZ was explicit in pointing out that the LUNA in Binance’s reserves was never sold or moved and users can verify this at the address here.

Among the thread of tweets, CZ was emphatic in highlighting that despite the exchange’s loss, the focus of LUNA, and its founder Do Kwon, should be to support users by compensating them before supporting Binance.

“To lead by example on PROTECTING USERS, Binance will let this go and ask the Terra project team to compensate the retail users first, Binance last, if ever,” said CZ. In his final tweet, CZ simply wrote, “Protect users”.

By now, details of LUNA’s disastrous descent have been well documented. But just in case, here are some general details: On May 8, the crypto space watched as the entire LUNA and UST ecosystem dissolved into chaos. The largest decentralized stablecoin, by market capitalization, lost its peg and investors saw LUNA essentially wipe out their funds. The chaos even prompted Janet Yellen, Treasury Secretary, to express concerns and call for stablecoin regulation at a Senate Banking Committee meeting. Web3Wire’s Chung Yee breaks down the details even further here

Stablecoin Under Attack

For some time, market sentiment has anticipated regulation in the crypto space likely starting with the famed stablecoins. Given the high-yielding interest rates for simply holding stablecoins, it was an obvious choice for investors over traditional finance savings accounts that offer barely half a percentage point. But given the last week with LUNA, answers are owed as the entire decentralized ethos comes under attack. 

Binance continues to take measures to back its CEO’s claim for protecting users in terms of bolstering its staffing and furthering crypto education, particularly around BUSD. Binance posted to their LinkedIn page a new role for Global Product Head (Stablecoin) – Core Platform emphasizing the role will focus on BUSD. Among the list of responsibilities for the role includes “extending the stablecoin service based on the mass adoption requirement, to deliver a better user experience process and services.”

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