Binance shuts down UST and LUNA trading, founder Changpeng Zhao expresses extreme disappointment in Terra, hopes for destruction of additional LUNA issuance.

"I am very disappointed with the way Terra's team handled the UST/LUNA incident, or rather, the lack of handling," said Changpeng Zhao, the founder of Binance.

After the UST/LUNA pair entered a death spiral, the cryptocurrency exchange Binance gradually closed or restricted various contract products until it ended spot trading of UST and LUNA on the 13th. Update at 22:27: Binance announced at 21:57 that after communication, spot trading of UST and LUNA has been resumed.

Zhao Changpeng Explains Suspension of UST and LUNA Trading

Zhao Changpeng stated that Binance prioritizes user protection, and the reason for suspending UST and LUNA trading is due to Terra's design of minting LUNA when UST is redeemed. Their validators caused a network halt, preventing deposits and withdrawals for anyone, including exchanges.

Some users were unaware of the massive release of LUNA and started buying cheap LUNA without realizing that when the network restarts and deposits can be made again, more LUNA will be released, leading to a price collapse. Due to these risks, Binance decided to halt trading.

Zhao Changpeng expressed that Binance aims to remain neutral, but had to make an exception this time.

He stated, "I am very disappointed with Terra's handling or lack of handling of the UST/LUNA incident. We asked them to restore the network, burn excess LUNA, and restore UST peg. However, we have not received a positive response so far, not even much of a response."

Terra Restores Network Again

Approximately two hours after Zhao Changpeng's post, Terra announced the network restoration again. However, validation nodes have disabled on-chain swaps and cross-chain operations are not allowed. There has been no response regarding the assets of users stuck on exchanges. Update at 22:27: Binance stated that Terra has ceased ongoing minting of LUNA tokens, Terra blockchain has resumed block production, and trading has been restored.