Binance CEO CZ Supports Terra Community, Wants More Transparency

The CEO of cryptocurrency exchange Binance, Changpeng Zhao (CZ), recently questioned the idea of a hard fork of the Terra blockchain as a means of reviving the once thriving LUNA and UST ecosystems. Immediately afterwards, CZ revealed his thoughts on the appropriate course of action for failed projects across the crypto community.

“It’s not going to work,” CZ said, dismissing validators’ idea of a hard fork of TERRA2, which would involve providing a new version of LUNA to all holders based on snapshots of holdings taken before the market crash. According to CZ:

"Reducing supply should be done by burning, not forking, and abandoning everyone trying to save tokens. I don't have any LUNA or UST. Just commenting."

Instead, he suggested that the Terra community should first use its Bitcoin (BTC) reserves to buy back UST in order to restore its peg.

CZ pointed out the potential problems of forking Terra, saying "minting, forking, not creating value". However, he suggested buybacks and burns as some ideal means of restoring the market value of tokens. While expressing his support for the Terra community, CZ emphasized the need to "increase their transparency. More!", including details about specific on-chain transactions (transaction IDs) for all funds:

"Failures can/will happen. But when they do, transparency, fast communication and accountability to the community are extremely important."

CZ further clarified that Binance has no investment in Terra, nor does the company hold any UST, refuting ongoing rumors on Crypto Twitter regarding Binance’s interest in Terra:

“Binance Labs invested $3M in Terra (layer 0 blockchain) in 2018. UST came after our initial investment.”

Binance’s investment arm, Binance Labs, has invested in a number of projects over the past four years, which according to CZ have seen varying degrees of success and failure.

Finally, CZ wants Terra to rebuild itself "in a proper and sensible way":

"Regardless of my personal views, or the final solution chosen, we will always be here to support the community in any way possible."

Binance was one of the first exchanges to suspend UST and LUNA trading on its platform as the Terra ecosystem began its death spiral.

As a result, Binance users were unable to spot trading the LUNA/BUSD and UST/BUSD pairs, the day after Terra blockchain validators were forced to take the network offline on May 12.