Binance suspended withdrawals for LUNA and UST amid the UST stablecoin losing its peg to the U.S. dollar on Tuesday.
Amid the collapsing Terra network’s cryptocurrencies Luna (LUNA) and TerraUSD (UST), crypto exchange Binance continues deactivating related trading services.
Binance’s derivatives arm Binance Futures has delisted coin-margined LUNA perpetual contracts, the firm officially announced on Thursday.
“Users are advised to close any open positions prior to the delisting time to avoid automatic settlement,” the statement by the platform reads.
Binance Futures has also started conducting automatic settlements on the contracts, reducing the leverage tiers and updating margin tiers for coin-margined LUNA perpetual contracts.
As such, the 8x leverage tier is now the max leverage tier available on Binance for LUNA perpetual contracts, replacing the earlier maximum available leverage of 21-25x. 11-20x leverage is reduced to 7x, while 6-10x leverage is replaced with a 6x leverage tier, according to the updated data.
According to the announcement, existing positions opened before the update will not be affected.
“Binance reserves the right to further change the max leverage and margin tiers for USDT-margined LUNA perpetual contracts without further notice,” the firm added.
The latest trading updates on Binance Futures come soon after Binance suspended withdrawals for LUNA and UST on Tuesday amid a massive selloff of tokens on the Terra network, with the UST stablecoin losing its peg to the United States dollar and crashing to $0.67.
Originally designed to hold its 1:1 peg with the U.S. dollar, the UST stablecoin crashed to as low as $0.30 on May 11, while its sister token LUNA lost more than 99% of its value at the time of writing. The events caused immediate shock for the wider cryptocurrency market, with the total market cap plummeting about $600 billion.
By design, UST is an algorithmic stablecoin based on a system of swaps between LUNA and UST as well as LUNA token burns to maintain the stablecoin’s 1:1 ratio.
In contrast to the UST stablecoin, major stablecoins like Tether (USDT) and USD Coin (USDC) are fiat-backed stablecoins, which means that they are based on equivalent cash reserves to maintain their value.