Binance Reduces Bitcoin-LUNA License as CZ Warns Against Algorithmic Stable Coins

Binance, the world's most traded cryptocurrency exchange by volume, has removed its LUNA perpetual contracts, which use bitcoin as margin, from its platform.

This comes after a strong warning from Cryptocurrency CEO Changpeng Zhao to "respect the market with caution".

Binance has taken down COIN-Margined LUNA Perpetuals from its platform.

Cryptocurrency is taking additional steps to address the current Terra situation.

The major cryptocurrency exchange announced Thursday that it is delisting COIN-margined LUNA Perpetuals. Coin Futures uses bitcoin as the underlying asset for its perpetual contracts, which means users must provide bitcoin for margin on their LUNA trades. The maximum leverage allowed on the exchange's USDT-margined LUNA perpetual contracts has also been reduced to 8x. These measures took effect this morning as the rest of the market continued to plummet.

The exchange had previously halted LUNA and UST withdrawals in retaliation for UST losing its peg to the U.S. dollar. UST is an algorithmic stablecoin that works closely with LUNA to maintain its peg, but severe selling pressure has brought the ecosystem to the brink of collapse. The problem started on Saturday, and Terra's status deteriorated throughout the week, with UST still trading below $0.60 USD while LUNA changed hands for cents. Today, LUNA is down 98.5% and trading at just over $0.02.