Binance CEO CZ Supports Terra Community, But Expects More Transparency

Changpeng “CZ” Zhao, the CEO of crypto exchange Binance, recently questioned the idea of ​​hard forking the Terra blockchain as a means of reviving the once thriving LUNA and UST ecosystems. Following on from this, CZ revealed its perspective on the right course of action for falling projects in the crypto community.

“This will not work”, said CZ rejected the validators’ idea of ​​a hard forking to TERRA2, which would mean that all holders would have to get a new version of LUNA based on a snapshot of the companies before the market collapse. CZ suggested:

“Supply reduction must be done through burn, not an old date, and anyone who tried to save the coin must be abandoned. I don’t have LUNA or UST either. Just comment.”

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

1/8 The past few weeks have proved to be a turning point for the crypto industry. We have witnessed the rapid decline of a major project, which caused ripples in the industry, but also a new-found resilience in the market that did not exist during the last market downturn.

— CZ Binance (@cz_binance) May 15, 2022

CZ pointed out the potential issues with Terra forking, saying that “Minting, forking, doesn’t create value.” However, he recommended buying back and burning as one of the ideal means of reviving the token’s market value. While showing support for the Terra community, CZ stressed the need for “more transparency from them. Much more!”, including details on specific on-chain transactions (transaction IDs) of all funds:

“Mistakes can/will happen. But when they do, transparency, prompt communication and community responsibility is extremely important.”

CZ further clarified that Binance had no active investments in Terra, nor has the company acquired any UST stakes, dismissing the ongoing rumors on Crypto Twitter about Binance’s stake in Terra:

“Binance Labs invested $3 million USD in Terra (the layer 0 blockchain) UST in 2018, coming much later after our initial investment.”

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

Finally, CZ hopes Terra can rebuild itself “in a good and sensible way”:

“Regardless of my personal views or the solution ultimately chosen, we will always be there to support the community in any way we can.”

8/ I just hope that the project teams can rise from the ashes and rebuild in a good and sensible way. Regardless of my personal opinion or the solution ultimately chosen, we will always be there to support the community in any way we can.

— CZ Binance (@cz_binance) May 15, 2022

Related: Breaking: Binance Suspends LUNA and UST Trading Due to Terra Blockchain Issues

Binance was one of the early birds to shut down UST and LUNA trading on its platform as the Terra ecosystem started its deadly spiral.

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