Binance applied Terra as a safe investment before collecting $ 40 billion

Binance applied terrausd as a "safe" investment, just a few weeks before the StableCoin and its counterpart Luna collapsed in a $ 40 billion out that shook the crypto industry.

The world's largest crypto exchange on April 6 advertised an investment program in which customers lend their terra to achieve a return of almost 20 percent, as "safe and happy" opportunity, a message, the Binance sent the Binance on their official channel in the telegram.

Terra and Luna, a number of linked digital tokens, were popular with crypto dealers who wanted to achieve high returns through credit programs that are known as “staking”, but lost almost all of their value at the beginning of this month at one of the largest crypto industry.

Binance is one of the most influential players in the crypto sector, handles transactions worth around $ 1 trillion per month and offers a wide range of financial products via its website. The promotion of Terra as a secure investment underlines the central role, the crypto exchanges play when choosing, which are easily made accessible to digital token mainstream retailers.

Advertising for crypto investments has developed into a problem for the supervisory authorities in several countries that are concerned about advertising campaigns that are taking the risk of cryptocurrencies down or encourage small investors to invest their money in complex products for digital assets that enjoy little legal protection.

The British government plans to tighten the standards for crypto advertising. Singapore banned almost all influencer ads for public transport and social media for crypto at the beginning of this year, while Spain said that influencers have to inform the supervisory authorities in advance about crypto posts.

The Telegram message from Binance, which was called 117,000 times on an app widespread by crypto enthusiasts, did not contain any information, although a website to which the advertisement was linked to "undergo cryptocurrencies under a high market risk". In 2021 Binance also advertised a Luna Staking program as a "safe" investment.

Binance said the Financial Times that it is now checking "how campaigns for projects like Luna are rated before they are advertised".

Terra is a so -called stable coin that tries to reflect the value of $ 1 by a relationship with the Luna cryptocurrency defined by algorithms. If Terra falls below $ 1, retailers are encouraged to buy the stablecoin and then redeem them for newly shaped luna tokens worth $ 1. You cancel the price difference as a profit. However, the relationship collapsed at the beginning of this month, which led to the values ​​of both coins collapsed to close zero.

The case of Luna met many retailers with severe losses and crashed into the cryptom market. Bitcoin, the most valuable crypto token in the world, has fallen to the lowest status since the end of 2020 when the Luna incident contributed to broader pressure on the market for digital assets.

Changpeng Zhao, Chief Executive from Binance, admitted on Friday in a blog post that "now is obvious that the whole thing was built on a self -conserving, shallow concept".

he added: "Terra had an ecosystem with some applications, but the growth speed of the ecosystem did not correspond to the speed of the incentives used to attract new users."

said ZHAO on the Financial Times Digital Assets Summit in April that the stock exchange is subjected to the coins on its platforms of a "Due Diligence", the most important metric for their decision-making is the popularity of a tokens. "If something is used by many users.. It has a value," he commented.

The group, which has no fixed headquarters, was criticized by the British financial supervision last year, which warned that the group's "complex and risky financial products" of the group are "a significant risk for consumers".

recently made progress in obtaining official permits elsewhere. Binance plans to “at least” “at least” a regional headquarters after the regulatory authorities gave approval at the beginning of this month of its local subsidiary as a registered service provider for digital assets-the first EU country to do this. Binance has also received similar permits in Dubai and Bahrain.