Binance Removes Terra (LUNA) Futures Contract Due To Drop Of 99 Percent

Binance announced that it will phase out its Terra (LUNA) futures contract with Tether (USDT) margin.(photo:doc.pixabay)

JAKARTA - Major crypto exchange Binance announced it will phase out its Terra (LUNA) futures contract with Tether (USDT) margin following a price drop of more than 99%.

In a blog post Thursday, May 12, Binance said it would take “precautionary measures” around the LUNA/USDT perpetual contract, and intends to remove the pair if the price drops below 0.005 USDT.

The announcement follows the exchange changing the leverage and margin levels for LUNA bound contracts on Wednesday, May 11 with the maximum leverage set at eight times for positions below 50.000.

Additionally, Binance said it will launch the LUNA futures contract on Binance USD (BUSD) margin on Thursday, apparently as an alternative investment vehicle if LUNA/USDT is phased out. According to the exchange, it has experienced “lags and bottlenecks” which has caused a large number of Terra network withdrawal transactions to be marked as pending.

Reported by Cointelegraph, the price of LUNA has fallen by more than 99% in the last 24 hours, hitting $0.004 at the time of publication following the mass sell-off. Volatility has affected many tokens in the crypto market, with Bitcoin (BTC) dropping below $27.000 to a 16-month low and Ether (ETH) below $2.000 for the first time since July 2021.

In the midst of extreme market volatility, many exchanges have addressed the FUD rumors circulating on social media regarding user funds.

Celsius Network CEO Alex Mashinsky told his Twitter followers on Wednesday that the platform "has not suffered significant losses and all funds are safe." Coinbase CEO Brian Armstrong also told users of the exchange that the company has “no risk of bankruptcy.”

On Tuesday, Terra co-founder Do Kwon hinted at a “recovery plan” for TerraUSD (UST), then added that he supports the community's proposal to increase the printing capacity of algorithmic stablecoins. However, Kwon hasn't posted any updates after the additional price drop from LUNA.