Binance has suspended withdrawals of UST and LUNA tokens due to “network slowness and congestion.”
Traders reported Tuesday morning Asia time that the orderbook for LUNA and UST appeared to be frozen. Binance doesn’t allow for UST and Luna orders to go through. For example, traders are not able to sell UST for anything below 70 cents.
At the time of writing, LUNA token was down 52% on-day, while UST was trading at $0.76.
Binance statement claims, the exchange will reopen withdrawals for these tokens once the network becomes stable again and the volume of pending withdrawals has reduced.
According to Terraform Labs, the network is experiencing naturally high levels of transaction volume. Company’s officials took to Twitter to ask users to be mindful of our public infra usage.
Currently the Luna Foundation Guard (LFG) has $171.4 million in USD in its reserves, down 85% from the previous day, $86.82 million in UST, down 41% from a day prior, and $84.5 million in AVAX.
The LFG has depleted its bitcoin reserves, which were liquidated to support the peg.
Later Kraken and CoinList have followed Binance lead. Both exchanges have also suspended withdrawals of UST and Luna at this time. Another leading crypto exchange FTX is currently still processing withdrawals of UST.
What is going on with Binance, UST and Luna?
TerraUSD (UST) which is the largest algorithmic stablecoin, briefly lost its dollar peg on Saturday.
UST fell to .987 before bouncing back on Sunday. Its sister token, LUNA, fell almost 10%. According to a new conspiracy theory, there might be a mysterious whale involved in a centralized attack on UST.
By Sunday morning there had been some more of similar efforts. Terra bounced back on Sunday afternoon. The UST peg to dollar was almost re-eastablished. UST changed hands for about $.998.
Now, something has obviously gone wrong again. It’s still unclear when will Binance renew UST and Luna withdrawals.