Following the tumultuous fall of Terra’s Luna, Binance delists it from its futures trading.
The announcement was made by the Binance derivative subsidiary earlier today. When the delisting occurred, the exchange instructed all traders with open positions to fulfill their obligations no later than 8:30 am (UTC) today. They would settle all USDT-Margined LUNA perpetual contracts automatically once the delisting took effect.
In addition, the exchange reviewed the LUNA perpetual contracts’ leverage and margin levels. The leverage maximum was subsequently increased from 21-25x to 8x for positions ranging from 0 to 50,000.
Although the new tiers did not apply to all positions, they did impact some of them.
Binance Futures had previously imposed leverage restrictions to prevent traders with 60-day and less-than-60-day accounts from trading. The idea was that the notional size individuals can open is determined by their leverage limit. A larger leverage limit implies a smaller notional size, and vice versa.
Reason for Delisting
Given the fact that Terra has suffered a significant set back in recent days, this latest action by the cryptocurrency provider is not at all unexpected. This week, USDT detached from the dollar and began to fall.
The price of USDT and LUNA tokens plummeted, with UST and LUNA holders panicking and selling-out. This only made things worse, resulting in a price collapse that might have been anticipated sooner.
Terra’s LUNA is down by 99.98 percent, trading at 2 cents less than this time last week, after plummeting 99.98% to $86 last week
On Tuesday, Binance announced that it would be suspending all withdrawals for both LUNA and its sibling token UST. Following suit were Kraken and KuCoin. The dropping of the coin-backed futures contract by Binance appears to be the latest blow to LUNA’s reputation. The exchange also retains the option to alter the maximum leverage limit and margin tiers for LUNA perpetual contracts at any time.