On Friday, May 22nd, Coinbase announced that they will be suspending the trading of both TerraUSD (UST) and Wrapped LUNA (WLUNA) following the massive crash that the Terra (LUNA) ecosystem experienced. The suspension of both tokens will commence on the 27th of May, 2022, roughly 2 weeks after the announcement of the trading platform.
The announcement was posted on the trading platform’s official Twitter account, stating ‘In light of recent volatility involving Terra ecosystem assets UST and LUNA, Coinbase will suspend trading in UST & WLUNA on May 27, 2022, on or around 12 PM ET on Coinbase.com, Coinbase Pro, and Coinbase Exchange.’
Addressing those with UST and WLUNA in their Coinbase Wallets, the exchange announced in the same Twitter thread that ‘The trading suspension will not affect customers’ access to UST & WLUNA wallets which will remain available for deposit and withdrawal functionality after the trading suspension.’
Additionally, they’ve also assured that ‘[they] will continue to monitor developments related to UST & WLUNA and update [their] customers as more information becomes available.’
TerraUSD is a stablecoin based on the Terra (LUNA) ecosystem that’s pegged to the US Dollar. It’s supposed to maintain a 1:1 price with the fiat but has crashed and currently trades at $0.11. This massive crash dragged Terra along, causing it to drop over 99% in the past week.
In a similar story, Wrapped Luna (WLUNA), which was supposed to maintain a 1:1 value with Terra, crashed hard as well.
TerraUSD is meant to maintain a US1 dollar value but it isn’t backed by US dollars. Instead, it uses LUNA as a reserve which means that they have to be burned to mint 1 TerraUSD.
Binance, the largest cryptocurrency exchange has suspended trading LUNA with Tether on the platform along with Coinbase. Moreover, Binance originally suspended its trading with UST and LUNA using BUSD but later resumed it on the same day.
Before the crash of both coins, Terra (LUNA) was included in the top ten cryptocurrencies by market cap and today, it exited the top 100.
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