“Seismic crypto market movements like we’ve seen this week tend to deliver some pretty brutal lessons,” Lennix Lai, an OKX director, said in an email. “We’re seeing a flight away from direct investment in DeFi (decentralized finance) protocols in the wake of UST breakdown.
“The reality is that centralized exchanges are set up to provide much greater levels of protection for users whatever the markets are doing,” Lai said.
In explaining the reasons for Binance's suspension, Zhao initially tweeted that "an exponential amount of new LUNA were minted due to flaws in the design of the Terra protocol. Some of our users, unaware of the large amounts of newly minted LUNA outside the exchange, started to buy LUNA again, without understanding that as soon as deposits are allowed, the price will likely crash further. Due to these significant risks, we suspended trading."
LUNA and other tokens continue to trade on crypto exchanges FTX and Gate at writing time.
"Withdrawals for LUNA and UST will open when the network becomes stable," Binance said.
UPDATE (May 13, 11:31 UTC ): Adds Binance suspension to headline, throughout.
UPDATE (May 13, 16:34 UTC ): Updated headline and story with information about Binance's resumption of trading of LUNA.
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