CZ on Holding LUNA Since 2018: Don't Want People to Think Binance Is "Front-Running" Retail Users

BlockBeats News, April 8th, CZ talked about the 2022 Luna crash in his new book "CZ: The Binance Story." Terra's stablecoin UST began to unpeg on May 7, 2022, and a few days later, its value plummeted by $60 billion. Back in the summer of 2018, Binance had invested in Terra, initially putting in $3 million, exchanging some for Terra's native token LUNA, but UST did not exist at the time of the investment.

During the crash, Terra claimed to have approximately $1 billion in reserves but neither used these reserves to stabilize UST nor provided a clear explanation. Do Kwon did not respond to the community's questions on Twitter, displaying a complete lack of transparency, which CZ found unsettling.

At the time, the Binance team informed CZ that the LUNA purchased for $3 million four years ago was now valued at $1.6 billion and asked if they should sell because the price might plummet rapidly. CZ ultimately decided, "Not to sell."

There were three reasons for this decision: First, as a long-term investor, selling at that critical moment would only intensify market panic. Second, such a massive sell-off would typically be carried out gradually over several months. With LUNA on the brink of collapse at the time, it was clearly not the right time. Third, CZ did not want people to think Binance was "front-running" to sell ahead of retail investors. The focus on Terra was to assist, not to rush for cashing out.

Binance still holds some LUNC tokens (LUNA pre-fork) acquired through investment in 2018, which have not been touched to this day.