archyworldys

Changpeng Zhao reveals Binance’s loss from Terra investment

Changpeng Zhao, CEO of the Binance bitcoin exchange, spoke about investing in the failed Terra project and announced the amount owned by the company in the UST stablecoin.

According to him, in 2018, Binance invested $3 million in Terra, receiving 15 million LUNA. The assets have not been moved or sold since then, Zhao said.

The value of the initial investment increased 560 times (to $1.6 billion) as the coin reached price highs. After the collapse of UST and LUNA, these investments are worth “a little,” the head of Binance added.

On May 8, UST lost its peg to the US dollar. This happened against the backdrop of an outflow of assets from the Anchor protocol due to a decrease in the rate of return on deposits to 17.87%.

On May 10, the quotes of the asset fell below $0.62. The fall continued on May 11, after which the LUNA coin, used for minting the algorithmic stablecoin, fell to $0.3.

On May 16, the Luna Foundation Guard organization reported that it almost completely spent a $3 billion reserve fund on saving UST. After the publication, the stablecoin quotes fell from ~ $0.14 to levels near $0.09.

The price of LUNA has fallen to $0.00018 (CoinGecko). Binance’s $3 million investment turned into approximately $2,700.

Zhao also said that the exchange has earned about 12 million UST from staking so far. Assets at the current price are worth just over $1 million.

The Terra team said it hopes to “use the remaining assets to compensate UST users, primarily low-value holders.”

“In order to set an example in protecting users, Binance will not hold on to this and will ask the project team to compensate retail investors first. We are the last, if ever,” Zhao said.

This decision was made by the exchange team unanimously after a five-minute discussion, the founder of Binance specified.

The idea of ​​​​prioritizing compensation to small holders of UST, previously expressed by an investor under the pseudonym PersianCapital, was supported by Ethereum co-founder Vitalik Buterin.

Subscribe to the ForkLog YouTube channel.

Found a mistake in the text? Select it and press CTRL+ENTER

Trending