Binance CEO Changpeng Zhao (CZ) clarified that they are not investing in Terra. After his harsh statements against the Terra team during the week, rumors were circulating on Twitter that Binance had invested 300 million in the Terra ecosystem.
Binance CEO CZ clears name from LUNA investment
Binance CEO CZ was on Twitter to address the rumors. Responding to all the rumors, he made the following statements:
First of all, I have to deal with the lies circulating on Twitter. Binance did not participate in Luna’s 2nd round and did not purchase any UST. Binance Labs invested $3 million in Terra in 2018. UST came long after our initial investment.
CZ also says that Binance Labs has invested in several altcoin projects over the past four years. Some of these projects were half-way through, while others were successful.
Can Terra succeed again?
On Thursday, Binance released an update announcing that it had delisted LUNA. The exchange also restricted the available leverage. USDT-margin LUNA futures set at 8x max. After LUNA approached $0.005, the exchange halted withdrawals of LUNA and UST in response to the UST losing pegged value against the dollar. As Cryptokoin.com reported, CZ warned investors on this date:
We are in a new market with many innovations. Algorithmic stablecoins are one of them.
The collapse of the Terra ecosystem was one of the highlights in crypto history as it needed the LUNA edition as an emergency relief package. As LUNA struggled to bounce back, it fell from the top 5 to 207 by market cap. Amid the slump, CZ added that he was hopeful that the project teams “will be able to rise from the ashes and rebuild in an appropriate and sensible way.”
Terra (LUNA) and TerraUSD (UST) in 2018 It was created by Terraform Labs, which was founded and headquartered in Seoul, South Korea. Terra Labs CEO Do Kwon is behind the project. The idea of creating an “algorithmic stablecoin” where LUNA can be burned to “press” UST to stabilize the UST when LUNA loses its 1:1 peg against the dollar and vice versa differs from other stablecoins like Tether. For example, if the UST reaches 0.99, a small amount of LUNA is lit, and if it reaches 1.01, a small amount of UST is pressed.
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