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Cryptocurrency Binance promoted the Terra stablecoin for a loan program weeks before it fell.
Terra and its connected token Luna lost around $40 billion in one of the biggest crypto crashes to date.
Binance told investors that the lending program was “safe and happy” and that they would earn 20% interest.
Cryptocurrency exchange Binance told investors that betting their Terra USD coins was a “safe and happy” resolution a while before the solid coin imploded, the Financial Times first reported.
Binance promoted a loan program on messaging platform Telegram on April 6. The program would see consumers bet Terra tokens for a 20% return, the FT reported that Binance did not provide any disclosure or danger when sending the original message. The message reached 117,000 people.
Merchants and cryptocurrency enthusiasts occasionally turn to messaging platforms like Telegram for their encryption and privacy. Binance then updated an online page to which the post connected, adding that cryptocurrency trading “is a high-risk issue in the market. “
Binance responded to Insider’s request for comment. The exchange told the FT that it is “now reviewing how campaigns for projects, such as Luna, are evaluated before they are announced. “
The fall of Terra USD, an algorithmic stablecoin that uses PC code to achieve parity with fiat currencies, has noticed investors losing more than $40 billion in one of the biggest cryptocurrency drops to date. Terra lost its parity with the US dollar on May 8. and reduced cryptocurrencies in the days and weeks that followed. Binance to avoid the exchange of stablecoins afterwards, which brought up “flaws in the design of the Terra protocol”.
Terra’s cave temporarily followed through its token sister Luna, who burns and beats to hold Terra’s ankle.
But the fall of terra has renewed calls for stricter regulation and supervision of cryptocurrencies. Treasury Secretary Janet Yellen said on May 12 that hard currencies posed a “significant risk to monetary stability. “
Read the article on Business Insider