%Binance, the world’s largest %Cryptocurrency exchange, has halted trading of %TerraformLabs %Terra ($Luna) cryptocurrency and the %TerraUSD ($UST) %Stablecoin as their prices plunge to $0.
The exchange indefinitely suspended the trading of Luna and UST tokens across its platform after the tokens lost nearly 100% of their value over the past few days. Luna’s price is currently at $0, while UST is hovering around $0.03 U.S.
The move, which follows Binance pulling support for trading of futures contracts for the Luna token on May 12, comes as Terraform Labs has increased the circulating supply of Luna tokens to over 6.5 trillion, up from 386 million at the start of the week in an attempt to push up the price of UST, a sister token of Luna that is also a stablecoin and supposed to be pegged 1-to-1 to the U.S. dollar.
Scores of other cryptocurrency exchanges, including %FTX, %Crypto.com, %KuCoin, %OKX and %CoinDCX have also taken steps to address trading of the volatile digital assets whose selloff is getting worse.
In the meantime, Terraform Labs has said it is halting the Terra %Blockchain and is working on a plan to reconstitute it. It’s the second time the Terra blockchain has been frozen this week.
TerraUSD, a so-called algorithmic stablecoin, aims to be a substitute for the U.S. dollar by intertwining with Luna, which has no fixed value. The plan is that if the value of UST falls below $1 U.S., it could be burned and exchanged for a dollar’s worth of Luna.
But when UST fell below $1 this week that algorithmic vision showed its limitations and the prices for both TerraUSD and Luna collapsed.
The loss of faith from cryptocurrency investors and aggressive panic selling prompted the price of Luna to fall to $0 from $80 U.S. earlier in the week. The value of UST is currently sitting at about $0.03 U.S. and was as high as $0.15 U.S. in early trading on May 13.
Terraform Labs has been scrambling to find ways to resolve the current meltdown in the price of both UST and Luna, but so far has had no luck.