A recent document indicated that Binance considered a $300 million investment in Terra. However, it appears that the deal was never finalized.
CZ Debunks Investment Claim
The VP of Research at The BlockCrypto, Larry Cermak, has shared a document that suggests that Binance invested $300 million in the Terra (LUNA) project. According to the document, these funds were pledged during a $1 billion funding round in which Three Arrows Capital (3AC) also participated. Cermak had also previously claimed that Binance led Terra’s seed round in 2019 and 2021.
The CEO of Binance, Changpeng Zhao (also referred to as CZ), has strongly refuted all such claims of Binance’s involvement with Terra. He clarified that Binance had made an initial and minor investment of $3 million in 2018, but nothing since then. He stated,
“Binance did not participate in the 2nd round of Luna’s fund raising nor did we acquire any UST. Binance Labs invested $3m USD in Terra (the layer 0 blockchain) in 2018. UST came much later after our initial investment.”
Addressing CZ’s comments, Cermak admitted that there was a possibility that the deal was not finalized. However, he stood by the authenticity of the document that he retrieved and expressed doubts about who to believe. He commented,
“So I guess they could have lied or never closed…Very difficult whether to trust CZ or Do Kwon at this point. But they used this doc for investors in the last round. If they didn’t close then who took the remaining $700M…?”
CZ: Forking Won’t Work
The LFG team is scrambling to pick up after the crash of the Terra USD (UST) stablecoin. The Founder and CEO of Terraform Labs, Do Kwon, has proposed a revival plan for the stablecoin, wherein the Terra blockchain is forked, creating a new chain, and distributing 1 billion tokens to stakeholders.
Not to be left behind, CZ had also shared his two cents on this proposed plan, claiming that a fork would not add any value to the chain and called it “wishful thinking.” He stated that minting coins are just equivalent to printing money and, instead of creating actual value, just dilutes the existing coin holders. He also questioned the existence of the Foundation’s bitcoin reserves, claiming that they should be used to buy back UST first.
He also commented,
“The last few days, we tried hard to support the Terra community. In my tweets, I am simply pointing out the potential issues from my understanding. Minting, forking, don’t create value. Buying back, burning does, but requires funds. Funds that the project team may not have. In this regard, I would like to see more transparency from them.”
Disclaimer: This article is provided for informational purposes only. It is not offered or intended to be used as legal, tax, investment, financial, or other advice.