Binance’s LUNA investment, which peaked at $1.6 billion, now worth just $3,000

Binance CEO Changpeng Zhao said the crypto exchange made large paper gains on its investment in Luna but has now lost practically all of them.

The exchange invested $3 million into the Terra ecosystem in 2018, receiving 15 million Luna tokens. At Luna’s peak price, that investment was worth $1.6 billion, according to Zhao. Yet due to last week’s collapse of Luna — and its related stablecoin TerraUSD (UST) — that investment has now plummeted in value to just $3,400. Or, in Zhao’s words, “not much.”

Yet it’s not all bad news. The exchange received around $10.3 million worth of UST in staking rewards (likely through Anchor, which offered up to 20% yield). While that would be worth $74 million if UST was holding its peg to the dollar and not trading at its current value of $0.13, it means Binance is still up on its initial investment.

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The algorithmic stablecoin UST broke from its peg to the US dollar last week, resulting in huge losses for investors in both UST and Luna, whose price was meant to support UST’s peg.

Zhao added that the exchange would rather see retail customers compensated and backed a proposal for those who lost smaller amounts of Luna to be made whole.

Zhao also confirmed that the exchange had been in talks about investing $300 million in Luna in a recent $1 billion round, but the deal never closed.