May 13, 2022 08:20AM ET
By: AnalysisWatch
Binance, a major cryptocurrency exchange, has announced that it will delist its Tether (USDT) - Terra (LUNA) margin futures contracts after a price drop of more than 99%.
In a blog post on Thursday, Binance said it will take "precautionary measures" regarding its LUNA/USDT contracts and intends to delist the pair if the price falls below 0.005 USDT. The announcement came after the exchange changed the leverage and margin levels for LUNA-related contracts on Wednesday, setting the maximum leverage at eight times for positions below 50,000.
In addition, Binance said it will launch LUNA futures contracts linked to Binance USD (BUSD) margin on Thursday, apparently as an alternative investment vehicle in the event that LUNA/USDT delists from the exchange. According to the exchange, there has been "slowness and congestion" which has led to a large number of transactions with withdrawals from Terra Network being marked as pending.
The price of LUNA has plunged more than 99% in the past 24 hours and was down to $0.004 at the time of the article's publication following a mass sell-off. Volatility has affected many tokens across the crypto market, with Bitcoin (BTC) falling below $27,000 to a 16-month low and Ether (ETH) dropping below $2,000 for the first time since July 2021.
Amid the extreme market volatility, many exchanges are grappling with FUD rumors circulating on social media regarding user funds. Celsius Network CEO Alex Mashinsky told his Twitter followers on Wednesday that the platform "suffered no significant losses and all funds are safe." Coinbase CEO Brian Armstrong similarly told users of the exchange that the company is "not in danger of bankruptcy."