LunaThe sister cryptocurrency to controversial stablecoin, ‘, TerraUSDNearly $0.

The TerraUSD (or UST) has come under fire in recent days following the “stablecoin”, which was supposed to be pegged with one another. U.S. dollar, fell sharply below the $1 mark.

UST, an algorithmic stablecoin that uses code to keep its price around $1 based upon a complex calculation, is called UST. system of minting and burning. To maintain the dollar peg, a UST token must be destroyed.

Unlike rival stablecoins TetherAnd USD CoinUST does not have any tangible assets, such as bonds to back it. Do Kwon created the Luna Foundation Guard to protect UST. is holding about $3.5 billion of bitcoin in reserve.

UST can be tested in volatile market times, like this week.

Investors are now rushing to sell the associated luna token as it’s no longer a peg. Luna has fallen from around $85 per week to trade at about 3 cents this Thursday according to CoinGecko. The cryptocurrency is now almost worthless.

Binance, the largest cryptocurrency exchange in the world, stated that Terra network, which is the blockchain linked to the luna token, was experiencing “slowness and congestion” on Thursday. Binance claimed that the Terra network, which is associated with luna tokens, has a high volume of Terra network withdrawal orders pending on its exchange. It’s a signal that investors are racing to get their hands on luna.

Because of congestion, Binance had to stop withdrawals of luna on Thursday for several hours before they were resumed.

Contagion has been sparked by the TerraUSD scandal. The Luna Foundation Guard has bitcoin in reserve. To support the peg, the fear is that the Luna Foundation Guard may have to liquidate its bitcoin holdings.

Bitcoin plunged 29% over the past seven days, and traded below $26,000 on Thursday to reach its lowest point since Dec. 2020.

The world’s most popular stablecoin Tether also fell below its $1 pegOn Thursday there was a wider panic on the crypto markets.