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Ify Egede
May 10, 2022
by Ify Egede

Binance Suspends Withdrawals on Terra Network

Terra Network Binance
The Terra (LUNA) network momentarily banned LUNA and UST token withdrawals on 10th May because of many queued withdrawal transactions. In this case, slow and congested internet connections are to blame. Binance will let people withdraw these tokens again when they think the network is stable and the number of withdrawal requests has gone down.

Binance Puts Terra Network Withdrawals on Hold

Binance has stopped LUNA and UST token withdrawals because the Terra-based stablecoin has trouble regaining its link to the US dollar. In a shared Binance blog post on Twitter this morning, Binance announced its decision to suspend all withdrawals on the Terra Network temporarily. They blamed the high amount of outstanding withdrawal transactions for the suspension.

According to the corporation, Binance will let people withdraw these tokens when they think the network is stable and the number of withdrawal requests has gone down. They will not inform users in a subsequent statement.

According to CoinMarketCap, UST is the third-biggest stablecoin by total circulation, after USDT and USDC, and the revelation comes at a time of significant volatility for UST. Efforts have been undertaken to strengthen UST. UST's index will be supported by a $1.5B loan from LFG, a Singapore-based organization established to promote Terra-supported stablecoins and the wider Terra community. 

The loan will be made to third-party trading businesses on 9th May to assist the UST index. Despite this, the value of UST has fallen with USDT, the most important dollar-pegged stablecoin. On 9th May, according to Binance data, it dropped as low as $0.6065. In the hours following, it has rebounded to roughly $0.85.

LUNA, Terra's asset that can be destroyed for UST under normal market circumstances, has dropped from about $62.50 barely 24 hours ago to about $28.50, according to CoinGecko's statistics. Terra and Luna Foundation Guard must also deal with significant volatility in the larger cryptocurrency market. This morning, BTC's price was hovering at $31.5K, having fallen below $30K.

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Binance Suspends Withdrawals on Terra Network
Ify Egede
Ify is an experienced and versatile writer and researcher. He has have keen interest in blockchain technology, Bitcoin, cryptocurrencies, fintech and emerging technologies. He has tons of published works both online and in the print media. He has close to a decade of writing experience. When he is not writing, he spends time with his lovely wife and kids.

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