Binance Suspends LUNA Withdrawals as Terra Token Sinks

Binance announced that withdrawals for Terra’s LUNA and UST tokens had been “temporarily suspended”.

Binance suspended withdrawals “due to a high volume of pending withdrawal transactions.”

The firm added that it would restart withdrawals once it deemed “the network to be stable and the volume of pending withdrawals” had reduced.

LUNA, the native token underpinning the Terra blockchain, shed 51.9% of its value in the past 24 hours and is currently trading at $29.53.

The coin is down 75% from its all-time high of $119.18 recorded in April 2022.

Terra’s native stablecoin, UST, also lost its dollar peg.

The stablecoin currently trades at $0.90 well below its dollar peg. It recovered from an all-time low of $0.6841, recorded earlier today.

And due to how closely UST and LUNA are interconnected, the stablecoin losing its peg has had serious knock-on effects.

UST is a decentralized algorithmic stablecoin, which means it doesn’t have a dollar (or other traditional assets) backing it like Tether’s USDT or Circle’s USDC.

Instead, its peg is governed by smart contracts, specifically a mint-and-burn mechanism between LUNA and UST.