According to a message Binance sent out on its official Telegram channel on April 6, the world’s largest cryptocurrency exchange advertised an investment scheme in which customers could lend their TerraUSD to earn a return of nearly 20 percent. It was called a “safe and happy” opportunity.
Binance’s Telegram message was viewed 117,000 times and did not contain a disclaimer, though the website the ad linked to noted that “cryptocurrency trading involves high market risk.”
On Friday, Binance CEO Changpen Zhao admitted in a blog post that “it is now clear that the whole thing was built on a self-replicating superficial concept.”
Although Terra had an ecosystem with multiple use cases, the growth rate of the ecosystem did not match the rate of incentives used to attract new users.