CZ Calls Terra ‘Stupid’. Twice.

CZ, typically polite, has become unmoored by the Terra UST fiasco. In his latest blog post, the CEO of the world’s largest crypto exchange says all the quiet parts out loud. 


  • Terra UST Fiasco: CZ Tells It How It Is
  • Crypto’s Teachable Moment

Terra UST Fiasco: CZ Tells It How It Is

In a blog post — that sometimes reads like a diss track — the CEO of Binance, Changpeng Zhao (a.k.a. CZ), decided to organize his many thoughts on the Terra/UST saga gripping crypto the last week. In a wide-ranging affair, CZ touched on design flaws, Terra’s depeg response, potential spillover, possible regulation, and how to move forward having learned something from the debacle.

He also referred to Terra as “stupid.” Twice.

Regarding the design flaws, CZ pointed out that, “The most stupid design flaw is thinking that minting more of an asset will increase its total value (market cap). Printing money does not create value; it just dilutes existing holders. Exponentially minting LUNA made the problem a lot worse. Whoever designed this should have their head checked.” 

CZ didn’t go so far as to recommend a neurologist to the Terra team, but he did give his opinion on what Terra should have done to recover the peg: “The Terra team was slow in using their reserves to restore the peg. The entire incident may have been avoided if they had used their reserves when the de-peg was at 5%.”

CZ added, again pointing out the lack of mental acuity from the Terra team, that the accusations hurled at Terra (re selling off their reserves to enrich themselves) could have been avoided. “In this case, it didn’t look like a scam. It was just (sorry for the lack of a more polite word) stupid,” he said.

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Crypto’s Teachable Moment

I think it’s fair to say CZ was pretty harsh in his assessment. He certainly could have maybe referred to one of Terra’s actions as stupid instead of twice, but considering how much money Binance has lost on the situation (their reserves of LUNA were worth over a billion USD at one point) it’s perfectly understandable.

Despite the vitriol, CZ is hopeful for crypto’s future thanks to how it handled the fiasco. “The combined size of UST and LUNA was bigger than Lehman Brothers when it failed.”

He added, “As an industry, we are resilient. While instances like the one with LUNA and UST are regrettable, we are committed to playing a crucial part in building a sustainable, enriching blockchain ecosystem for all.”

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