The Swiss GAM asset manager and Terra negotiate a $3 billion bailout and it emerged as the first global giant to offer help to the failing crypto project so let’s read more today in our latest cryptocurrency news.
Following the recent fiasco, Terra and its two cryptocurrencies crashed in value and the platform said it will seek outside help. One of the first legacy financial companies which stepped up to provide help is the Swiss GAM asset manager. The official press release by the 40-year company reads that it started negotiations with Terraform Labs to provide support for its LUNA stablecoin. GAM said it is expected to invest between $2 billion and $3 billion to absorb the supply of UST during the current selloff which should revive the UST peg to the dollar. The CEO Peter Sanderson of GAM added:
“Our interest in supporting UST reflects our interest in supporting a vibrant, innovative, and resilient crypto market. We firmly believe in Terra’s ecosystem. Just as importantly, we believe in UST’s algorithmic approach to valuation. When investors have proper incentives, they naturally trade in ways that maintain price stability.”
Due to the algorithmic nature of UST and the relation with LUNA, once the stablecoin starts losing its peg against the dollar, the investors start taking advantage of the system by arbitraging it with LUNA. This led to huge selling pressure on the latter which boosted the price slump and LUNA traded above $80 a week ago but sits at $0.000055. most exchanges also halted trading for the coins and Terra announced blockchain stoppage a few hours ago.
As recently reported, After a warning of delisting, the crypto industry’s biggest exchange Binance halted tradign for Terra and removed all of the trading pairs for LUNA and UST. The world’s biggest exchange announced that it delisted both UST and LUNA so the tokens were removed from both margin and sports markets as of today. The exchange also warned users about delisiting the LUNA and Tether trading pairs if the price of the coin dropped below $0.005.
Earlier this week, Binance halted the withdrawals temporarily of UST and LUNA owing to network congestion that was caused by the high volume of pending withdrawals. Terra’s native governance and staking token crashes by almost 100% a day ago and now trades at $0.00005395 as per the data from coinmarketcap.
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