Binance CEO Changpeng Zhao spoke regarding investing in a failed project Terra and announced the amount owned by the company in the UST stablecoin.
2/ Binance received 15,000,000 LUNA (at peak worth $1.6 billion USD, now not much) as part of the original ($3m) invest. 560x return at peak. It still sits on the address we received at ????. Never moved or sold.
Address:https://t.co/6HwTu6CCuB
— CZ ???? Binance (@cz_binance) May 16, 2022
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.
May 8 UST lost its peg to the US dollar. This happened once morest 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%.
May 10 asset quotes dropped below $0.62. The fall continued on May 11followed by the coin used to mint the algorithmic stablecoin LUNA collapsed to $0.3.
On May 16, the Luna Foundation Guard reported that almost completely spent to save UST, a $3 billion reserve fund. After the publication, the stablecoin quotes fell from ~ $0.14 to levels near $0.09.
LUNA price fell to $0.00018 (CoinGecko). Binance’s $3 million investment turned into approximately $2,700.
Zhao also said that the exchange has earned regarding 12 million UST from staking. 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 it 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 following a five-minute discussion, the founder of Binance specified.
4/ Now the important part.
To lead by example on PROTECTING USERS, Binance will let this go and ask the Terra project team to compensate the retails users first, Binance last, if ever.
Binance (following a 5 min discussion) fully support this proposal. ????https://t.co/QnMx8aZ09A
— CZ ???? Binance (@cz_binance) May 16, 2022
Previously expressed by an investor under the pseudonym PersianCapital, the idea of priority reimbursement to small holders of UST supported Ethereum co-founder Vitalik Buterin.
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