Hello CoinSwitch Users,
We have an important update for you.
As a result of recent events surrounding the LUNA token, we are delisting it on our app. The crypto market — like the broader stock markets as well as several other asset classes — is going through some turbulent times and at CoinSwitch our goal has always been to help you understand the nuances of the crypto market better. It is natural for you to have questions at a time like this. This is our attempt to address them.
Q1. What is the LUNA crisis about, and why are we delisting?
A1. As a result of incessant selling at exchanges, Terra ecosystem’s popular tokens LUNA and UST have been crashing for a while now. Primarily an algorithmic stablecoin platform, Terra’s UST lost its dollar peg (a mechanism to keep the value of 1 UST fixed at $1). This de-pegging of sorts created market-wide panic, leading to UST dumping.
(Watch this for more information on the Terra crash:
LUNA, UST’s sister coin which was also listed on CoinSwitch, fell as a result. Overall, the dips had a ripple effect, pushing LUNA prices even further. And the crisis didn’t stop with the price drop.
Terra, being a delegated Proof-of-Stake (dPOS) ecosystem, became susceptible to governance attacks (51% attacks) as the tokens became way cheaper. Consequently, Terra halted its blockchain activity.
Now, zero blockchain activity means zero liquidity. So, as there is no financial movement in and out of the Terra ecosystem, CoinSwitch cannot buy or sell LUNA tokens on your behalf.
That’s why we chose to delist LUNA for now. We hope that doing this will keep our users from panic selling or buying further at the constantly dipping rates.
Note: LUNA SIPs will also be deactivated until further notice.
Q2. Are my LUNA holdings safe?
A2. As mentioned, we have delisted LUNA for now. If you choose to sell, you can do so before 14 May at 5 PM. However, if you choose to hold on to your LUNA tokens, do note that the number of tokens you hold will remain intact and will be shown on your portfolio. There will be no force-selling of LUNA tokens.
Q3. Can I liquidate or sell my current LUNA holdings?
A3. You can sell your LUNA holdings till 5 PM on 14 May. After that, no trades can be executed for LUNA. You may choose to continue to hold your tokens.
Q4. Can I expect a relisting?
A4. Relisting is contingent on external factors that we are closely monitoring. Firstly, Terra needs to resume the blockchain activity and liquidity needs to return to the market for anyone to be able to trade these tokens. Until then, the token will remain unlisted. You can hold on to your tokens and may be able to start trading in them if and when the relisting is done. Also, there are chances of Terra shutting the blockchain activity indefinitely, which would make the relisting all the more uncertain.
We encourage you to keep doing your own research and collecting details to keep up with developments in the Terra ecosystem. We will also be keeping you updated.
Q5. Are my other tokens safe?
A5. All your other holdings are safe with us, regardless of this incident. And even the LUNA tokens remain in your portfolio. They just cannot be acted on.
Q6. What can I do as an investor?
A6. As an investor, you can choose to liquidate your LUNA holdings by 5 PM on 14 May 2022 (IST). Or, if you choose to, holding on to the tokens is also an option. The token will continue to reflect in your portfolio. We would urge you to do your own research and opt for the strategy that best suits your interests.
Q7. Can I move my LUNA holdings to an external hardware or online wallet?
A7. Not for now. As Terra blockchain activity has been suspended, transferring crypto from an exchange to wallet isn’t an option anymore. Simply put, after 5 PM on 14 May 2022 (IST), any form of LUNA withdrawals will not be supported, until further notice.
We will keep you posted as things develop. If you have any other questions, feel free to reach us at email@example.com. As always, we’ll be happy to help bring more clarity to you.