Binance CEO Changpeng Zhao said Monday that the cryptocurrency exchange never sold the 15.4 million LUNA it received in return for a $3 million investment made in the Terra ecosystem in 2018.
Binance’s holdings in the Terra blockchain’s governance token were at one point worth $1.6 billion.
Now it’s worth just $2,461, and still sitting in the wallet that it was sent to—”never moved or sold,” Zhao wrote in a tweet.
The wallet holds 3.4 million LUNA and has staked the rest.
“There is 12mm LUNA used for staking back in 2021,” a Binance spokesperson told Decrypt in an email, “and that’s how this address gets UST rewards, Binance Labs had never invested in UST before.”
The 12 million TerraUSD (UST), Terra’s algorithmic stablecoin, was paid out as rewards from 8 million LUNA that Binance staked with Orion.Money and 4 million LUNA the firms staked with the Staked protocol. Both transactions took place on July 1, 2021.
After a raucous week that began with UST losing its dollar peg last Monday, the Terra blockchain was halted twice to regroup and stymy the damage.
At the time of writing, the chain has resumed and UST is trading at $0.10, according to CoinMarketCap, and the UST is worth $1.4 million.
Binance backs Terra
Terra founder Do Kwon has also been making headlines for months after he began buying millions worth of Bitcoin to the reserve backing UST.
Before this, the stablecoin maintained its peg via a unique mint-and-burn mechanism in tandem with the LUNA token. Each time UST fell below $1, users could buy the discounted UST, and then swap it (burning the UST in the process) for $1 in LUNA, before flipping that LUNA for a small profit on the open market.
Besides just a dollar-pegged stablecoin, Terra also offered many other world currencies including the euro, yen, pound, and many others.
“And this is exactly why Terra is not just another stablecoin, but a better payment network using a price-stable digital currency to complement both existing fiat and cryptocurrencies ,” Binance wrote in a 2019 blog post, “ retaining all the censorship resistance of Bitcoin, and making it viable for use in everyday transactions.”
But since UST lost its 1:1 peg with the dollar last week, the crypto exchange has been critical of the way the team handled the situation.
“I am very disappointed with how this UST/LUNA incident was handled (or not handled) by the Terra team,” Zhao wrote on Twitter on Friday, saying the Terra team had been unresponsive after halting its network.
Later that day, after warning that it would need to delist UST and LUNA trading pairs, Binance pulled them from its platform.
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