Ethena Proposes Emergency Buyback Plan for USDe Stability After Binance Depegging Incident
Ethena Labs has announced a contingency mechanism to stabilize its synthetic stablecoin USDe, following a depegging event on Binance in October where USDe's value dropped to $0.6567 despite the protocol remaining solvent. The emergency plan allocates up to 1.2% of USDe's backing assets to repurchase tokens below $0.99 through off-exchange settlements, addressing vulnerabilities exposed during the market turmoil on October 10-11. This proactive measure aims to restore confidence in USDe's peg and prevent similar incidents in the future.
Ethena Proposes Emergency Mechanism to Stabilize USDe After October Depegging Event
Ethena Labs has unveiled a contingency plan to safeguard its synthetic stablecoin USDe, allocating up to 1.2% of backing assets to repurchase tokens below $0.99 through off-exchange settlements. The move follows October's market turmoil when USDe plunged to $0.6567 on Binance despite protocol solvency.
The stabilization strategy addresses exchange-level vulnerabilities exposed during the October 10-11 dislocation, where ethereum network congestion and trading constraints prevented arbitrage from correcting the depeg. With $5 billion in liquid reserves backing USDe, the protocol aims to prevent cascading sell pressure during volatile periods.
Binance's USDe/USDT pair became ground zero for the crisis as Leveraged liquidations triggered a self-reinforcing spiral. The new mechanism creates an automatic bid floor during disorderly market conditions, circumventing exchange bottlenecks that exacerbated October's depegging.
CZ Addresses Potential $4.3 Billion Binance Refund Following Trump Pardon
Changpeng 'CZ' Zhao, the recently pardoned founder of Binance, responded to speculation about the potential return of $4.3 billion paid in the 2023 federal settlement. When asked on social media what Binance WOULD do if the funds were refunded following his pardon by former President Donald Trump, Zhao called it a "delicate question" but indicated the company would reinvest the amount in the U.S. as a gesture of appreciation.
The crypto executive emphasized gratitude for the pardon itself, stating there's a balance between seeking fairness and appreciating what's already been granted. Binance had previously pleaded guilty to violations including failure to maintain anti-money laundering safeguards and agreed to the historic settlement.
The revelation comes amid ongoing political controversy, with Representative Maxine Waters criticizing Trump's pardon decision. The case remains a landmark example of regulatory enforcement in the cryptocurrency sector.
CZ's Trump Pardon Denial Sparks Debate Over Binance's Political Ties
Changpeng 'CZ' Zhao, founder of Binance, was granted a presidential pardon by Donald TRUMP in late October, reigniting scrutiny over potential links between political favors and cryptocurrency ventures. CZ's legal team vehemently denies any 'pay-to-play' arrangement, with lawyer Teresa Goody Guillen stating the pardon was lawful and unrelated to Binance's reported involvement with Trump-linked World Liberty Financial.
Binance allegedly provided technical support for World Liberty Financial's USD1 stablecoin project, with a $2 billion investment partly facilitated through USD1 tokens. Critics point to CZ's 2023 guilty plea for compliance failures and subsequent four-month prison term as grounds for skepticism. The pardon has drawn mixed reactions, with some lawmakers calling for investigations while Binance maintains its operations were above board.
