A year after Do Kwon’s empire collapsed, Binance has finally made a decision on Terra Classic Futures (LUC).
As South Korean prosecutors seek Do Kwon’s extradition, Binance decided to reduce the leverage of its LUNC futures contracts before permanently withdrawing them on June 8.
Binance Cuts Ties to Terraform Labs
According to Binance, all open positions in USD-M 1000LUNCBUSD futures contracts will be automatically closed on June 8 at 09:00 UTC.
To avoid liquidations, the crypto exchange is urging traders to reduce their leveraged positions by next Thursday at
As a reminder, crypto futures are derivatives that allow you to sell or buy an asset at a set price and settle it at a later date.
Traders can open long or short positions on futures contracts. Likewise, they can borrow money from a broker to initiate leveraged positions.
Binance’s decision comes more than a year after the LUNC/BUSD spot trading pair was suspended. The exchange has actually decided to reduce the margin on the LUNC futures contracts, as well as the burned trading fees.
Also note that LUNC is the original token of Terra Classic, a platform created by South Korean developer Do Kwon.
This token, which reached an all-time high of $119 in April 2022, crashed after the depeg of TerraUSD (UST). In fact, the stablecoin lost its parity with the US dollar due to a wave of withdrawals on 4Pool, a liquidity pool based on Curve.
Despite the Terra Luna team’s efforts, the LUNC price dropped from $119 to pennies in a matter of hours.
At the time, Changpeng Zhao, founder and CEO of Binance, said:
“I am very disappointed with the way the UST/LUNA incident was handled (or ignored) by the Terra team”.
As a reminder, Binance, Huobi, Coinbase and OKX have invested heavily in the Terra ecosystem. To help the crypto market recover, Binance has even launched a support fund exclusively for struggling crypto companies.
LUNC, a crypto doomed to fail?
During an episode of the Bankless podcast, CZ noted that many experts sounded the alarm before Terra Luna collapsed. But according to him, most investors have turned a deaf ear.
Ryan Sean Adams, the podcast host, also pointed out that TerraUSD’s “toxic relationship” with LUNC is now evident.
To learn more about algorithmic stablecoins, we invite you to read this guide.
Charles Cascarilla, the co-founder of Paxos, was one of the first experts to sound the alarm about the Terra Luna ecosystem. As a reminder, Paxos is the company that issued the BUSD stablecoin before it was banned by New York State authorities.
It should also be noted that the court in Montenegro eventually refused to release Do Kwon on bail. While South Korean and American prosecutors are asking for the extradition of the fallen entrepreneur, authorities in Montenegro have still not made a decision on the case.
Moral of the story: for sure, the Terra Luna saga is only just beginning.
Disclaimer
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