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Binance CEO Changpeng ‘CZ’ Zhao has released the chat logs of the company’s internal leadership team during the Terra crisis.

The records detail a conversation between CZ and Binance head of product Mayur Kamat in which they discuss what to do with Binance’s 15,000,000 LUNA, once worth $1.6 billion. The coins were part of the company’s initial $3 million investment in Terra and are now worth just $2,700.

In a tweet thread from May 16, CZ said:

“Binance will let this go and ask the Terra project team to compensate retails users first and Binance last, if ever.”

The release of the chat logs showcases that this decision took just five minutes to decide. In a text message to CZ, Kamat stated:

The ability to decide to forego billions of dollars to put its users first is something extremely alien to traditional capital markets. A CEO has a fiduciary duty to make decisions that best serve the company, not necessarily its customers.

Both groups’ interests are often correlated, yet Binance could have saved hundreds of millions of dollars by selling its LUNA tokens amid the crisis. Not doing so stopped the situation from being even worse (if possible) and means that Terra LUNA will remove 15,000,000 LUNA coins from the new LUNA fork. A comment from Kamat reviewing the events reads,

“You will see signs that tell you that you are working in an extraordinary company. It will usually be in decisions made when things were hard. That said I have never worked anywhere where we made them this quickly.

Money is fungible, even large amounts. But user trust is much harder to gain and much faster to lose. Prioritize the important and protect the users the best you can.”

Kamat’s logic makes a strong case for the decision to let billions of dollars disappear being in the best interest of Binance long term. A company being seen to protect its users at a considerable cost to itself may well be one that users prefer.

However, it is also possible that Binance could not have done anything about the $1.6 billion LUNA coins even if it had wanted to do so. This may all be a PR move, and the release of the screenshots is simply part of a campaign to promote a positive image of the company. Gaining access to private keys for exchange-held wallets is notoriously tricky by design. The use of multi-sig wallets or splitting private keys among key leadership members is often used to protect against embezzlement and fraud.

From May 9, it took less than 48 hours for LUNA to crash 98% down to just $1 per coin. At this point, UST was trading around $0.21, and Do Kwon and the LFG team began selling tens of thousands of Bitcoin to restore the peg. By May 11, UST had reached $0.79, and there were signs of a recovery. However, the algorithmic relationship between UST and LUNA caused the latter to crash down to $0.00000136 by May 13.

At this point, Binance’s LUNA coins were worth just $20.40. CZ’s tweet detailing that Binance would not be moving or selling its 15 million LUNA arrived on May 16. Therefore, unless Binance decided not to sell the LUNA coins before May 10, the coins did not hold any real value anyway.

Whatever the reason for not selling the tokens, it is still a nice gesture to the Terra community that one of the original investors is willing to forego any airdrop so as not to dilute the rest of the ecosystem. However, an alternative theory is that Binance wants nothing to do with the new chain and may not even list it after its release. Two chains will be created on May 27 when the fork occurs. The new chain will be named $LUNA, and the current chain will rename $LUNC. Will Binance list both coins or choose to remove itself from the Terra system entirely?

The post Binance took just 5 minutes to get over loss of $1.6B in LUNA appeared first on CryptoSlate.

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