While the crypto community is even now struggling to decipher the pegging-de-pegging fiasco of Terra concerning the stablecoin offering UST (TerraUSD) thereof, Binance (a prominent crypto exchange) terminated the withdrawals for UST and LUNA (Terra) on Tuesday. Recently, the market value of the stablecoin offering of Terra (UST) plummeted to lower than the anticipated price point at $1.00 as a substantial drop was witnessed in the price of LUNA due to a large selloff.
Simultaneously, the trading pair BTC/UST on Binance rose to the extraordinary points of $42,000, whereas the rest of the BTC dollar markets attempted to reserve $30,000, according to the earlier reports. As a responsive step against the continuous uncertainty witnessed in the ecosystem of Terra, Binance adjourned the entirety of the withdrawals for UST and LUNA tokens until 6 hours, while referring to the considerable volume of withdrawal transfers that are pending presently.
As per the crypto exchange, the big volume of pending UST transfers is because of the congestion and slowness of the network. It also admitted the probable inconvenience to its investors and asserted that Binance will resume the withdrawals to entertain the respective tokens after they feel that the network is stable once again and a considerable decrease has been witnessed in the pending withdrawals’ volume. In such a situation, they will inform their consumers about it in an additional declaration.
Nonetheless, a reaction was posted by Crypto Twitter to the announcement of Binance by inquiring about the intrinsic standards of decentralization on which the crypto community is standing, in comparison with a shift toward a centralized approach normally displayed by conventional finance. While worldwide customers are restricted from making withdrawals of their funds, the respective suspension of the funds has been referred to by the community as one of the chief disadvantages of a centralized exchange of cryptocurrency.
Nevertheless, the very move has been supported on the behalf of a few community members by mentioning that Changpeng Zhao (the CEO of Binance) assisted several investors by preventing them from liquidating by trading stablecoins at $0.70. Though Terra keeps on looking for a long-lasting solution for UST’s dropping value, several crypto entrepreneurs taking into account Sandeep Nailwal (the co-founder of Polygon) expressed support for Do Kwon (the Terraform Labs’ CEO). On 18th April, BUSD (Binance USD) turned into the third-biggest stablecoin throughout the market due to UST.