Binance CEO Changpeng Zhao spoke about investments in the collapsed Terra project and disclosed the amount the company holds in the stablecoin UST.
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, Zhao noted.
The initial investment’s value rose 560-fold (to $1.6 billion) as the coin reached price highs. After the collapse of UST and LUNA, these holdings are now worth “a little,” the Binance chief added.
On May 8, UST lost its peg to the US dollar. This occurred amid withdrawals from the Anchor protocol due to the deposit yield falling to 17.87%.
On May 10, the asset’s price fell below $0.62. The decline continued on May 11, followed by the LUNA coin used to mint the algorithmic stablecoin dropping to $0.3.
On May 16, the Luna Foundation Guard reported that it had nearly exhausted its $3 billion reserve fund to rescue UST. After the release, the stablecoin’s price collapsed from around $0.14 to near $0.09.
LUNA’s price plunged to $0.00018 (CoinGecko). Binance’s $3 million investment had turned into roughly $2,700.
Zhao also said that the exchange has earned about 12 million UST from staking over its lifetime. The assets are currently worth a little over $1 million.
The Terra team said it hopes to use the remaining assets to compensate UST users, primarily holders of small amounts.
“To show an example of protecting users, Binance will not pursue this and will ask the Terra project team to compensate retail investors first. We — Binance — are last, if ever,” Zhao said.
The decision was taken unanimously by the exchange’s leadership after a five-minute discussion, Zhao added.
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 (after a 5 min discussion) fully support this proposal. ?https://t.co/QnMx8aZ09A
— CZ ? Binance (@cz_binance) May 16, 2022
Earlier, the idea floated by an investor under the alias PersianCapital to prioritise reimbursements to small UST holders was backed by Ethereum co-founder Vitalik Buterin.