Binance Labs had invested a total of $3 million in Terra in 2018. For this they received around 15 million LUNA, which were not sold, as CEO Changpeng "CZ" Zhao explained via Twitter.
When the LUNA price hit its all-time high, the investment was worth around $1.6 billion. It was a hefty loss as it is now valued at around $2,900. The fact that the profit was not realized is also part of the business and is offset by other investments. This is part of the investment strategy, according to Zhao.
Most recently, the CEO of Binance defended itself against allegations that the exchange had benefited from the situation in some way or that it was involved in Terra and shared responsibility.
Are there any compensations?
The exchange also owned the stablecoin UST. The 12 million UST were not bought, but collected through fees and staking. Although they were involved in the talks about a further round of financing for Terra, it was never concluded and the original investment was not increased.
Finally, “CZ” asked Terra to compensate small investors and announced that Binance would waive any compensation in order to give priority to the masses of investors. A gesture of decency that seems appropriate for the entire industry given the messy situation.
The Luna Foundation Guard announced yesterday how the funds it manages have been used. According to this, UST was successively bought during the crash. Now there are still around 250 million US dollars in the pot , which one would like to distribute to small investors first. However, it is still disputed how the money should be distributed to those affected. So there is light at the end of the tunnel and a glimmer of hope for all those who lost their savings in the crash.
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