Binance Halts LUNA and UST Withdrawals, Citing ‘Network Congestion’

Key Insights:

• Binance halts LUNA and UST withdrawals temporarily.
• The exchange states the reason as “high volume of pending withdrawal transactions.”
• LUNA was slowly stabilizing at $31.4 and UST is back above $0.90, after witnessing a huge plunge.

As Terra (LUNA) and TerraUSD (UST) experience a drastic decline, the largest crypto exchange Binance has temporarily suspended the withdrawal of LUNA and the UST stablecoin.

Binance will reopen withdrawals

In an announcement on Tuesday, the crypto platform announced that it has suspended both tokens as a result of a high volume of pending withdrawal transactions. Binance (BNB) said that this was due to “network slowness and congestion.”

The firm further noted that this suspension is temporary and Binance would resume withdrawal operations for LUNA and UST:

“Binance will reopen withdrawals for these tokens once we deem the network to be stable and the volume of pending withdrawals has reduced.”

A Reddit user posted a screenshot of Binance’s notice while trying to withdraw UST tokens. The notice said that the temporary halt is to prevent users from experiencing long wait times.

The release noted that Binance would not notify users in a further announcement, however, the notice estimated a recovery time with a reminder option for users.

The news arrives amid high market volatility for Terra’s USD-pegged stablecoin UST, which plummeted against the dollar in the last few days.

Recently, a number of large withdrawals from Anchor Protocol (ANC), a lending market that provides high rates to users who deposit UST, seem to trigger off the de-pegging, causing UST to drop to a low of $0.60, a staggering 40% from the USD.

As of press time, the Terra (LUNA) cryptocurrency is slowly recovering from the plunge below $25 and trading at $28.93 and the UST is stabilizing around $0.90.