Binance CEO Changpeng Zhao jokingly said that he is now "poor again" after the Terra LUNA crash.
We all know that's not true, but moving on.
Chanpeng Zhao, also called CZ, is known to be the CEO and founder of the most popular crypto exchange platform to date, Binance. The Terra project, both the LUNA token and TerraUSD, have experienced massive volatility in the past few days.
CZ stated that Binance's LUNA holdings reached a valuation of $1.6 billion at its peak, down from about $2,200 this week. Although it most certainly cost very little compared to its billions of worth prior to the market swing.
Binance CEO's LUNA Holdings
CZ, according to the Forbes 2022 Billionaires rankings released on April 5, is the wealthiest person in the cryptocurrency industry. He has an estimated net worth of $65 billion. Although it now looks like this is currently changing as the market moves.
According to Markets Insider, CZ said that Binance's LUNA holdings,once valued at $1.6 billion, were received in exchange for the company's $3 million investment made in 2018 into the Terra network, the foundation upon which LUNA is built.
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.
— CZ 🔶 BNB (@cz_binance) May 16, 2022
Address:https://t.co/6HwTu6CCuB
In an effort to bring the ecosystem back to life, after Terra lost its value to the dollar, Terra's founder, Do Kwon, published a short-term road map. As part of the plan, $1.4 billion U.S. dollars in UST were to be burned, and 240 million LUNA tokens were to be staked, all in an effort to halt the devaluation of the U.S. dollar's peg to the U.S. dollar.
Because of this, in order to protect its users, Binance Futures delisted coin-margined LUNA perpetual contracts, despite the fact that there were plans to save the failing LUNA and UST. Due to the problems that LUNA is encountering, the Binance CEO assured its users that it has a holding of $12,000,000 UST in storage.
The CEO also tweeted that he wants to lead by example in protecting users' privacy.
4/ Now the important part.
— CZ 🔶 BNB (@cz_binance) May 16, 2022
To lead by example on PROTECTING USERS, Binance will let this go and ask the Terra project team to compensate the retails users first, Binance last, if ever.
Binance (after a 5 min discussion) fully support this proposal. 👇https://t.co/QnMx8aZ09A
As of writing this, Terra (LUNA) price is now at $0.000134 with a market cap that is down 26%, as per CoinMarketCap.
Terra LUNA and TerraUSD's Market Swing
Over the course of the past two weeks, there has been a dramatic decrease in the value of LUNA. As previously reported, the intensified swing and volatility in the cryptocurrency market is mainly attributed to the destabilization of stable coins. Just recently, LUNA's sister coin, TerraUSD, has lost its peg to the U.S. dollar.
The Terra network has two coins in the crypto market: the Terra (LUNA) token and the stable coin TerraUSD (UST). The values of the two tokens are inextricably linked to one another. The drop in TerraUSD's value, in turn, dragged down LUNA's.
When the price of TerraUSD dropped, many investors hurriedly sold off their holdings of that token to prevent losses. The sell-off was enormous enough that it caused the market to move.
