wiped out in the most dramatic collapse of a major digital asset in the last few years.
At 5 pm India time on Coinmarketcap, the Luna token was trading at $.00003513, almost 99.96% down in the last 24 hours.
On May 6, the token had been trading at $80 before the slide started. Alt coin Luna was popular with Indian crypto investors after rising from $1 to touch $119.18 in a matter of 12 months.
“Indian crypto investors have lost big amounts due to the current crash. I am hearing horror stories on how small investors have seen their Luna investments turn to zero in a matter of hours,” said Chahal Verma, a Gurgaon-based crypto investor.
The Indian exchanges were notifying users on what to do with their holdings.
“After careful deliberation, we have decided to delist Luna from Coinswitch Kuber,” said Ashish Singhal, founder and CEO, CoinSwitch. “If you own Luna, you can sell it by May 14, 5 pm (IST). If you still choose to hold on to Luna and not sell, your holding will still reflect on the CoinSwitch account. You will not be able to buy any more Luna, however.”
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WazirX has delisted three trading pairs from its platform: Luna/Inr, Luna/WRX, and Luna/USDT.
Leading exchange Coinswitch also halted Luna transactions.
“Huge overnight market volatility caused the collapse of the Terra network, leaving a ripple effect across the entire crypto ecosystem,” said Minal Thukral, SVP, growth and strategy, Coinswitch. “The prospects of several crypto players with exposure to Luna are under stress. While this is certainly an unfortunate turn of events, we remain confident about the strength of the market recovery, which will happen in due course. As a precautionary measure, CoinDCX has halted transactions for Luna to protect traders on our platform.”
Meanwhile, Bitcoin and other cryptocurrencies bounced back on Friday after recording losses over the week. Bitcoin had crossed $30,000 after touching $26,000 on Thursday. Ethereum was up 8%, Binance Coin had jumped more than 11% and Solana had risen 16%. The total market cap of cryptos was at $1.31 trillion on Friday.
The Terra Network-operated stablecoin UST, Luna and Anchor were interlinked. The issues started on Monday when Terra’s algorithmic stablecoin Terra USD (UST) started falling due to talk of some big players dumping the digital asset. This led to a run on Luna and once the UST was depegged from the dollar, the coins crashed.
On Friday, the Terra network was halted by validators as its supply increased exponentially. On Thursday too, the network was stopped to prevent governance attacks.
Global crypto major Binance announced that it had temporarily suspended all deposits and withdrawals on the Terra network.
Experts said that investors should research the projects, the technology and promoters before investing in tokens and not just follow returns blindly.
“A cryptocurrency is a functionary product of the underlying technology, blockchain, which could change many if not most traditional processes and businesses in the world today,” said Toby Gilbert, CEO, Coinweb. “Investors should be looking very closely at the underlying technology and team delivering it for any token that they are considering buying. Whilst Terra had a team with pedigree in areas of software development and tech startups, they didn’t when it comes to financial products and, as a result, now over 4 million investors are paying the price. There’s a good reason why regulators play the role that they do in traditional markets.”
Some Indian exchanges such as BuyUcoin and some global exchanges like Kucoin and FTX have chosen not to delist Luna in the hope that the blockchain ecosystem still has some hope of revival.
“At BuyUcoin, protecting the interest of our users is our topmost priority and delisting Luna would mean that the entire investment of users will become zero,” said Shivam Thakral, CEO, BuyUcoin. “BuyUcoin has not delisted Luna which gives our esteemed users to minimise their losses through cost averaging. We always advise our users to invest in crypto with a horizon of two-three years.”
Earlier, crypto experts had pegged Luna at $143 by the end of 2022.