Binance CEO Says LUNA’s Collapse Left Him “Poor Again”

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the Terra’s LUNA collapse and TerraUSD (UST) cost investors over $40 billion and shocked many in the industry. As the crypto community digests the impact of the network’s implosion, some insiders are saying “I told you so” while others are lamenting their support for the once-popular crypto.

For example, Galaxy Digital CEO Mike Novogratz, who was so enamored with Terra that he got a LUNA wolf tattoo, told shareholders, “My tattoo will be a constant reminder that venture capital investment requires humility.” He added: “It was a great idea that failed.”

Binance CEO Changpeng Zhao (also known as CZ) said the company had 15 million LUNAs, which were worth $1.6 billion at the top of the token. His “poor again” tweet might not sit well with retail investors who have lost a significant chunk of their life savings. CZ may have lost some money, but Bloomberg estimates his net worth to be over $15 billion, which ranks him 108th on the Bloomberg Billionaires Index.

Plus, it’s easy to see what something would have been worth if you had sold it at the top. In reality, it is extremely difficult to time the market and sell at the highest point. It is more accurate to think that Binance lost $3 million – this is the amount originally invested in Terra. Binance received its LUNA tokens as part of its investment agreement and never sold them.

Binance Pushes for LUNA to Reimburse Small Investors First

Binance is one of the biggest cryptocurrency exchanges in the world. The exchange was criticized for suspend LUNA and UST withdrawals at the start of the collapse. He said this was due to network congestion, but the move frustrated many investors.

Since then, CZ has pushed a message of transparency and user protection. “To lead by example in USER PROTECTION, Binance will drop out and ask the Terra project team to compensate retail users first, Binance last, if ever,” he tweeted.

CZ got frustrated with Terra’s handling of the situation. He has joined other figures in the crypto world to push for funds to flow to smaller wallets. A proposal on social media suggested that if Terra focused on the “poorest” 99.6% of UST wallets, they could make this group 100% gigantic.”

What to do if you lost money in the LUNA collapse

Many retail investors lost money when Terra and its network disintegrated. There are heartbreaking stories on the Terra Reddit forum of people who lost savings, either buying LUNA or UST. Despite all the talk of stimulus packages and compensation, it doesn’t look like investors can expect much from their Terra tokens.

You might recover a small percentage of your investment. But since the Luna Foundation Guard has spent most of its reserves trying to support the ecosystem, very little money is left. According to South Korean media, Terra founder Do Kwon could face criminal charges, although it’s too early to tell how those will play out.

1. Think twice before buying more LUNA

Some investors are already buying LUNA tokens in hopes of a phoenix-like ash comeback. Cryptocurrency investment is risky enough without speculating on the recovery of a coin that has already collapsed dramatically. I am not a financial adviser, but the Terra Network is extremely unlikely to recover, and there is a high risk that you will lose money after the damage.

2. Make a new savings plan

Losing money is always difficult, especially if it disrupts your savings and overdue retirement plans. Now that the initial shock has passed, it may be time to think about how you can rebuild. Start by taking stock of your financial situation and considering how you can realistically handle the situation.

If you are struggling to cover living expenses, do not ignore the problem. Contact your creditors and seek any financial support you may be entitled to. If you’re about to pay your bills, think about how much you could set aside each month to replenish your savings. Even a small amount of money each month can add up over time.

What is important is to make a plan that includes building a emergency fund, pay down debt and build a retirement fund. It won’t be easy, but if you break it down into small, achievable steps, you can rebuild your finances.

3. Make sure crypto is only a small part of your new investment strategy

When you’ve lost a lot of money, it can be extremely tempting to take high risks in hopes of recouping your losses. Even more so if you have seen the value of your crypto portfolio skyrocket in the last year and you hope it will happen again in the future. But cryptocurrency is a risky asset class and the way to build long-term wealth is to have a mix of assets. Look for a way to hold safer investments such as cash, stocks, bonds and real estate. If that sounds daunting and you don’t know where to start, it may be worth consulting a professional for advice on building a diversified portfolio.

LUNA’s collapse came as a shock to many investors, large and small. It showed how experimental this industry can be and how quickly the market can change. If you have lost large sums, it can seem overwhelming. But the sooner you can deal with the situation and look for ways to rebuild, the better.

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We are firm believers in the Golden Rule, which is why editorial opinions are our own and have not been previously reviewed, approved or endorsed by the advertisers included. The Ascent does not cover all offers on the market. The editorial content of The Ascent is separate from the editorial content of The Motley Fool and is created by a different team of analysts.Emma Newbery has positions in Terra. The Motley Fool holds positions and recommends Gala and Terra. The Motley Fool has a disclosure policy.

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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