Binance has banned withdrawals of LUNA and UST tokens as the Terra-based stablecoin tries to regain its peg to the US dollar.
Crypto exchabge Binance announced the temporary restrictions in a blog post this morning, blaming network congestion for "a huge volume of outstanding withdrawal transactions."
"Once we determine that the network is stable and the volume of pending withdrawals has decreased, Binance will reopen withdrawals for these tokens."
In a subsequent notification, we will not alert users," the company added.
The announcement comes amid a period of significant volatility for Terra's algorithmic stablecoin UST, which has fallen substantially against the dollar in recent days. UST is the third largest stablecoin by total issuance behind USDT and USDC.
To strengthen UST, significant efforts have been made. The Luna Foundation Guard (LFG), a Singapore-based non-profit dedicated to supporting Terra-based stablecoins as well as the broader Terra ecosystem, has revealed a plan to lend $1.5 billion in bitcoin and UST to third-party trading firms in order to support UST's peg on May 9.
Despite this, the price of UST has fallen in comparison to USDT, the largest dollar-pegged stablecoin.
On Monday, UST hit a low of $0.6065. However, it has rebounded to roughly $0.85 at press time.