KuCoin Explains Reason for Undelegating 48 Billion LUNC Tokens

This recent action from the popular and widely used cryptocurrency exchange incited a soft level of FUD in the Terra Classic community, which resulted in a further decline in the price of LUNC.

The Kucoin validator node on the Terra Classic network, initially pledging a delegation of nearly 50 billion LUNC, undelegated 48 billion LUNC tokens on December 30. 

As a result, Kucoin dropped drastically in the Terra Classic validators list to position 44th on the undelegation day. Likewise, the prominent Terra Classic validator’s voting power dropped to as low as  0.21%. 

This also triggered FUD around the centralized exchange as some users expressed doubts regarding KuCoin’s solvency status. Reportedly, some users have moved their LUNC holdings away from KuCoin to Binance exchange, the largest contributor to the LUNC but expedition. Meanwhile, CZ’s Binance revealed plans to slash its LUNC burning contribution by 50% following the Terra Classic community’s proposal to remint burned LUNC into circulation. 

 A certain Twitter user and web developer named Peter wrote, “So KuCoin has began undelegating/ redelegating all of their holdings on their validators on LUNC, LUNA, and ATOM (That we’ve confirmed) Could this mean that KuCoin could be going insolvent? Or are they stepping back from validators?”

In response, the exchange explained the reasons for the 48 billion LUNC undelegation and debunked all insolvency claims and negative presumptions regarding running validator nodes. KuCoin added that users’ assets are safe. 

Read Also: Terra Classic (LUNC) Burn Rate Spikes by 6,940% on the First Day of 2023. Here’s how

KuCoin Validator Node To Redelegate 48 Billion LUNC

Per a Thursday tweet, KuCoin plans to continue supporting the Terra Classic community, citing that its validator will continue to pledge after the 14 days lock period. 

According to the exchange, its validator node undelegated a large portion of its LUNC holdings given that the pledge node of the internal financial account switched. 

“Hi, the KuCoin validator undelegated 48b $LUNC because the pledge node of the internal financial account switched. Rest assured that users’ assets are safe. We will continue the pledge after the 14-day lock period. This is a normal node switch,” the update read. 

Read Also: LUNC Development Group TerraCVita Set to Launch Terra Classic DEX in 2023

At press time, KuCoin which also supports LUNC burn ranks 46th on the Terra Classic validators list. The exchange is presently delegating only about 1.62 LUNC worth $242,000 at the current exchange rate, which entitles it to a voting power of 0.19%. 

As earlier reported, Classy Crypto, running a community validator on the Terra Classic network burned 100% commission earned from the validator node to further support the LUNC burning mission. Classy’s Sphere validator, which has roughly 15.5 billion LUNC worth $2,310,000 staked, is ranked 13th.

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