After the Terra token (LUNA) fell to below 2 cents in the day plunging over 99%, validators halted chain operations in anticipation of governance attacks and to implement a patch that prevents new actors from staking on the network.
The Terra blockchain then restarted around 1:45 p.m. ET Thursday.
According to Terraform Labs’ official Twitter account, the blockchain network was halted at block height 7,603,700. The move is the result of a series of dramatic incidents that led to an unprecedented decline in the value of LUNA and its stablecoin, TerraUSD (UST). This week, the stablecoin, which was designed to maintain algorithmic parity with the US dollar, lost its peg before falling below $0.30.
Following the continued collapse of Terra’s UST stablecoin, which has roiled the broader crypto markets in unprecedented fashion, US regulators are pushing for policies requiring stablecoin issuers to be treated like banks
“We’ve just had over this last week with Terra and with Tether an illustration of the risks associated with stablecoins…there can be runs,” …”we invented a good regulatory framework for dealing with this, and that is a federally insured depository institution.”
US Treasury Secretary Janet Yellen said Thursday during testimony before the House of Representatives Financial Services Committee.