Binance suspended withdrawals of LUNA and UST tokens as stablecoin struggles to recover its peg to US dollar

According Binance, withdrawals for LUNA and UST on the Terra (LUNA) network were temporarily suspended on 10 May 2022 at 02:20 AM (UTC) due to a high volume of pending withdrawal transactions.

Binance suspends LUNA and UST withdrawals amid market turbulence

Binance announced the outage in a blog post earlier this morning, blaming “a high volume of pending withdrawal transactions” caused by network congestion.

“Binance will reopen withdrawals for these tokens once we deem the network to be stable and the volume of pending withdrawals has reduced. We will not notify users in a further announcement,” the company added.

The news comes amid a markedly tumultuous period for algorithmic stablecoin Terra UST, which has plummeted against the dollar over the past few days.

Considerable efforts have been made to strengthen UST. Luna Foundation Guard (LFG) announced plans to lend $1.5 billion worth of BTC and UST to third-party trading firms with the intention of providing support for UST’s peg on May 9, as AZCoin News reported.

However, the price of UST has continued to fall against USDT, dropping it to as low as $0.6065. It has recovered somewhat within hours from rising to around $0.85 at press time.

Meanwhile, LUNA has plummeted from around $62.50 just 24 hours ago to around 28, $50 at press time. There is also significant volatility in the broader crypto markets for Terra and LFG to compete.

Also, Wu Blockchain tweeted that the Bitcoin address of the Luna Foundation Guard has just transferred 28,205.5 BTC to Binance, and the balance of the address is 0 now. The address transferred 42,530 BTC out earlier today and then transferred 28,205 BTC in.

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According to LFG, Similar to the last deployment, BTC has been loaned to MMs. Very little of the recent clip has been spent but is currently being used to buy UST.

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