The collapse of the Terra ecosystem has shaken the crypto market as the price of LUNA cryptocurrency falls to dust from once being the top-5 cryptocurrencies by market cap. However, amid all the ongoing drama, some rumors floated on Twitter that crypto exchange Binance was one of the big investors in the Terra LUNA ecosystem.
Binance CEO Changpeng Zhao has come forward to clear the air regarding the same. In his recent thread on Twitter, CZ wrote:
“First, I need to address falsehoods circulating in crypto Twitter. Binance did not participate in the 2nd round of Luna’s fund raising nor did we acquire any UST. Binance Labs invested $3m USD in Terra (the layer 0 blockchain) in 2018. UST came much later after our initial investment”.
Furthermore, Zhao said that Binance has invested in several crypto projects over the last four years. Some have outperformed while some have gone to dust. “That’s how investments work,” explains CZ.
CZ Asks What is Terra Doing About Its Bitcoin Reserves
Ever since the collapse of the Terra ecosystem, some market players have been suggesting ways to recover from this situation. One of the latest proposals was to hardfork Terra 2.0, create a snapshot of holdings before the collapse triggered, and provide LUNA holders with new LUNA 2.0.
Responding to this, CZ said: “This won’t work. Forking does not give the new fork any value. That’s wishful thinking. One cannot void all transactions after an old snapshot, both on-chain and off-chain (exchanges)”.
He further questioned what is Terra doing about all its Bitcoin reserves that were meant to protect the UST’s dollar peg. “Shouldn’t those BTC be ALL used to buy back UST first?” he asked. In his latest thread, the Binance CEO also mentions:
The last few days, we tried hard to support the Terra community. In my tweets, I am simply pointing out the potential issues from my understanding. Minting, forking, don’t create value. Buying back, burning does, but requires funds. Funds that the project team may not have. In this regard, I would like to see more transparency from them.