Binance announced that the exchange will close positions on Terra Classic (LUNC) futures contracts prior to delisting.
While prosecutors are working to extradite Do Kwon back home, Binance will adjust the leverage and margin of LUNC futures on June 1 before delisting on June 8.
BINANCE CLEARLY RELATED TO THE TERRA ECOSYSTEM
Binance will close and automatically liquidate all open positions on USD-M 1000LUNCBUSD perpetual contract at 09:00 UTC on June 8.
Traders are advised to reduce their margin positions according to Binance changes by Thursday noon UTC to avoid liquidation.
Cryptocurrency perpetual futures are derivatives inspired by traditional finance that are settled in cash. This settlement is different from a futures contract which is settled through the delivery of an asset at a predetermined price and date.
Traders must provide a margin to indefinitely maintain a long or short position in a perpetual futures contract. Investors can also borrow money from a broker to create leveraged positions.
Binance’s move comes about a year and three weeks after the exchange halted the LUNC/BUSD spot trading pairs. Recently, Binance agreed to reduce the LUNC margin rate and the transaction fees it regularly burns.
LUNC is the native cryptocurrency of the Terra Classic blockchain created by Korean programmer, Do Kwon.
Once one of the biggest cryptocurrencies with an ATH of $119, LUNC began a “freefall” after a large amount of related stablecoin TerraUSD was withdrawn from Curve 4Pool shaking investor confidence. invest in the ecosystem.
When Terra crashed and investors fled the UST, an algorithm continuously generated more LUNCs, causing its price to drop to almost zero.
LNH/USD. Source: CoinGecko.
Binance founder and CEO Changpeng Zhao said at the time,
I’m very disappointed with how the Terra team handled (or didn’t handle) this UST/LUNA issue.
Prior to that, Binance and competitors like Huobi, Coinbase, and OKX invested in the Terra ecosystem. The collapse of Terra and several other crypto platforms prompted Binance to set up a fund to help struggling crypto businesses.
The LUNC Vulnerability Is Now Clear
Zhao recently commented on a Bankless podcast that several industry experts had sounded the alarm about Terra before the “catastrophe” unfolded.
Bankless host Ryan Sean Adams commented that the link between TerraUSD and LUNC is now clear. Although before, this was not noticed at all.
Among those who were skeptical of the project from the start was Paxos CEO Charles Cascarilla. Paxos issued Binance-branded stablecoin BUSD before being banned by New York regulators.
Hedge fund manager Kevin Zhou likened his Terra warnings in early 2022 to the battle between “Rome” and Kwon’s “Carthage” empire.
The Montenegro High Court has denied Kwon bail pending trial on charges of forging a passport in Montenegro. South Korean and US prosecutors want Kwon for defrauding Terra’s investors, though it’s unclear which side will win extradition rights.