Binance has temporarily put on hold withdrawals for LUNA and UST tokens on the Terra [LUNA] network on 10 May 2022 in the early hours citing a high volume of pending withdrawal transactions.
According to the notice published on the website, this was caused by network lags and high congestion. Once it stabilizes and the volume of pending withdrawals comes down, Binance said it would resume the transaction.
“We will not notify users in a further announcement. We apologize for any inconvenience,” the blog read.
Multiple reports began to surface on Twitter that traders were unable to sell UST for anything below 70 cents.
Kraken and CoinList too joined in suspending withdrawals at the time of this post. However, FTX is still processing withdrawals of UST. Following the suspension, Terra’s official Twitter handle account requested users to not indulge in spamming during the high volume saying,
“If you are using the public infra, please do not spam it at this time as we are experiencing naturally high levels of transaction volume. Please be mindful of our public infra usage.”
LUNA foundation attempts to salvage its stablecoin UST’s de-pegging
The news comes at a time of high market turmoil, especially for Terra’s algorithmic stable coin UST which has spiraled uncontrollably, registering a sharp decline against the dollars in the past few days.
TerraUSD [UST] has lost its dollar peg for the second time in three days, falling to $0.65 on Monday. As UST has “depegged,” the price of LUNA the Terra blockchain’s native asset has also declined from around $61 to roughly $29 in a matter of 24 hours at press time, data from Coinmarketcap showed.
Efforts were made to salvage the token to prevent it from further falling. Its creator Luna Foundation Guard [LFG] announced a plan to lend $1.5 billion worth of bitcoin and UST to third-party trading firms in a bid to bolster support for UST’s peg on May 9.
The LFG even emptied its bitcoin reserves, which were liquidated to defend the peg. But the price continued to plummet against that of USDT, the largest dollar-pegged stablecoin.