Binance CEO says retail users should be the first to be reimbursed after Luna crash

Representative image (Source: Reuters)

The world’s largest crypto exchange Binance had the potential to reap huge earnings from Terra’s UST stablecoin before it crashed last week, along with its sister cryptocurrency Luna, reported Fortune.

In 2018, Binance put $3 million in Luna and received 15 million tokens in return. At Luna’s price peak in April 2022, those tokens were worth $1.6 billion. Now at Luna's price, the tokens are worth about $2,391, Binance’s CEO Changpeng Zhao said in a tweet.

2/ Binance received 15,000,000 LUNA (at peak worth $1.6 billion USD, now not much) as part of the original ($3m) invest. 560x return at peak. It still sits on the address we received at . Never moved or sold.

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Address:https://t.co/6HwTu6CCuB

— CZ Binance (@cz_binance) May 16, 2022

Despite Binance’s big losses, Zhao said he still wants retail traders who lost money during Luna’s crash last week to be reimbursed before Binance is. “To lead by example on PROTECTING USERS, Binance will let this go and ask the Terra project team to compensate the retails [sic] users first, Binance last, if ever,” Zhao tweeted on May 16.

Binance has been a key supporter of the company that created Luna, Terraform Labs, for years. Binance’s investment arm was a lead investor in a $32 million funding round in 2018 that Terraform Labs said at the time was meant to build a “modern financial system on the blockchain", according to VentureBeat.

The Binance CEO said last week that he was “very disappointed” with how the team behind Luna and UST handled the collapse. When Terraform Labs CEO Do Kwon said he wanted to fork Terra, or create a new blockchain and distribute millions of tokens in a new cryptocurrency to supporters, Zhao said it won't work.

The sister token of stablecoin TerraUSD Luna crashed to $0 on May 13, showing a 100 percent erosion in its value. It was trading at an all-time high of $116 on April 5.

The market capitalisation of the token slumped from around $40 billion to around $6 million during the last seven days, according to Coinmarketcap. Luna’s downfall started when sister token UST, was 'depegged' from its $1 value as big investors started dumping it.