coinquora.com
One of the largest cryptocurrency exchanges in terms of daily trading volume, Binance, has recently announced that LUNA and UST withdrawals on the Terra (LUNA) Network are temporarily suspended until further notice.
On May 10 at 5:30 am (GMT +2), Binance, on its support page, announced that LUNA and UST token withdrawals on the Terra (LUNA) Network “[are] temporarily suspended on 2022-05-10] until further notice. Binance cited the “high volume of pending withdrawal transactions” behind the temporary suspension.
The high volume of pending withdrawal transactions can be attributed to network slowness and congestion.
Binance concluded its announcement by saying withdrawals for LUNA and UST will reopen once the Binance team deems the Terra Network stable and “the volume of pending withdrawals has reduced.”
One of the reasons that the Terra Network is deemed unstable is due to the fact that UST appears to be in a catastrophic tailspin, which has seen it de-peg from the dollar, dropping to as low as $0.6841 on May 10. As the price of UST fell, it dragged the price of Terra (LUNA) along with it.
The chaos of UST losing its USD peg has caused quite a bit of network uncertainty and instability, resulting in a lot of pending withdrawals on Binance. The congestion is further worsened by Terra and UST investors and holders panicking.
It is not yet confirmed when, and if, the Terra Network will stabilize and UST will regain its peg to the dollar. However, the Luna Foundation Guard (LFG), who is in charge of ensuring UST maintains its peg to the dollar, has been in damage control in an attempt to mitigate further losses and return the stablecoin to $1.00.