Bill Ackman, an activist investor, commented on the Terra issue, describing the protocol as an altcoin version of the ponzi scam.
Bill Ackman calls Terra a “ponzi scheme”
Disclosures are due to release of Terra Blokchain’s UST stablecoin, which triggered a massive bank run-off in a few days It came after it had lost almost all of its value in it. According to Ackman, UST’s promise of a 20% return on value with no major activity behind it is the most revealing sign of a ponzi scheme.
Ackman is the founder of hedge firm Pershing Square Capital. His outspoken and hands-on investing style has earned him the nickname “the activist investor.” His latest statements are also an indication of his support for Blockchain. He also praised blockchain as a “great technology” on Twitter, but said startups like Terra are dimming the industry. According to Ackman, the platform’s appeal is due to the digitization of LUNA and the buzz around the crypto market.
Activist investor agrees to regulate the altcoin market
Ackman suggests stronger self-regulation in the altcoin market, especially for companies that do not have any underlying businesses to support tokens. argues. Before debilitating legislation shuts down the great and the bad, the crypto industry should self-regulate other crypto startups without underlying economic concepts. According to Ackman, if hype tokens are not backed by value-providing companies, the entire crypto industry will be destroyed.
Following the Terra incident, which we covered in cryptokoin.com news, concerns about increased crypto regulation have increased. Some leading US and European officials have advocated enacting laws to protect investors from such a disaster.
Terra’s rehabilitation strategy critically reviewed
Ackman’s words, Terra’s founder Do Kwon suggested a rescue came with significant criticism over his plan. On Monday, Kwon suggested turning the Terra into a new upgrade “Terra 2.0”.
— Do Kwon 🌕 (@stablekwon) May 16, 2022
However, including Binance CEO Changpeng Zhao Numerous prominent crypto influencers have questioned the concept, claiming that instead of generating new value, it will dilute LUNA investors. The Terra community has argued that blockchain reserves should be used to restore some value to their holders. Others have suggested a mint and burn mechanism to help keep their token value stable.
