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Terra Halted Again, Exchanges Send Mixed Signals on Trading

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  • All economic activity on the Terra blockchain has ceased
  • Exchanges are weighing whether to halt trading, as the future of the Terra assets remains uncertain

Just hours after halting and then restarting the Terra blockchain, validators appear to have thrown in the towel, deciding for a second — and this time indefinite — halt, late Thursday. Major exchanges soon opted to delist the LUNA token, a move that signals the end of the project in its current form.

Earlier Thursday, the community acted to protect assets from a malicious governance attack, including the bonded ether, AVAX, ATOM and SOL locked in the Anchor Protocol, which retain their value. In light of the chain halt, the Anchor team asked its users via its official Twitter account to “stay tuned for future updates.”

Coinbase will soon suspend trading on LUNA. The Kraken exchange has suspended deposits and withdrawals.

The position of Binance is unclear. The exchange had signalled an end to trading of Luna with Binance CEO Changpeng “CZ” Zhao explaining the decision was in part because of a lack of understanding among users of LUNA’s supply expansion.

“Some of our users, unaware of the large amounts of newly minted LUNA outside the exchange, started to buy LUNA again, without understanding that as soon as deposits are allowed, the price will likely crash further. Due to these significant risks, we suspended trading,” he said in a Twitter thread.

In a now-futile effort to restore the UST 1:1 peg to the US dollar, the Terra protocol is designed to mint LUNA continuously, and the current circulating supply has exceeded 6.5 trillion, up from an original supply of 1 billion. That has spurred the price collapse to well below one thousandth of a cent.

But Binance’s official Twitter account announced a resumption of trading on the LUNA/BUSD and UST/BUSD trading pair at 10:00 am ET, then 20 minutes later posted an update that the trading resumption was “delayed,” only to re-announce minutes later that trading would resume at 10:30 am ET.

Coinbase had initially announced that they would facilitate further trading by creating a more precise quote tick of 0.00000001 on all WLUNA pairs. Coinbase only ever offered trading on wrapped-LUNA, an Ethereum token representation of the native Terra asset. But just 11 hours later, they too opted for a total end to WLUNA trading, effective from 12:00 Noon ET, citing “recent volatility involving Terra ecosystem assets.”

Just 7 days ago, the total market cap of LUNA and UST alone stood at north of $45 billion. Today, it is essentially worthless, as stakeholders assess various options for what might come next.

This story was updated on May 13, 2022, at 10:32 am ET.


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    Macauley Peterson

    Macauley was an editor and content creator in the professional chess world for 14 years, prior to joining Blockworks. At Bucerius Law School (Master in Law and Business, 2020) he researched stablecoins, decentralized finance and central bank digital currencies. He also holds an MA in Film Studies; film credits include Associate Producer of the 2016 Netflix feature documentary, “Magnus” about World Chess Champion Magnus Carlsen. He is based in Germany.

    Contact Macauley via email at [email protected]

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