Thursday, September 29, 2022

US Lawmaker Pat Toomey Makes Wild Accusations About Terra, Says Crash May Have Been A Fraud

Republican U.S. lawmaker, Senator Pat Toomey has shared an unpopular opinion about the failed blockchain project, Terra. Speaking in an interview with Barron’s, Toomey says the Terra project may have been out to defraud investors all along.

Terra Could Have Been A Fraud — Senator Pat Toomey

To buttress his point, the lawmaker highlighted many characteristics of Terra, which to him, were similar to those of most known fraudulent schemes. Most importantly, its promises of massive returns for offering a non-transparent and dubious technology.

Interestingly, however, there seem to be many more like Senator Toomey, who thinks the Terra project was shady from the get-go, at the very least.  Sharing Toomey’s sentiments, popular hedge fund manager Bill Ackman also recently opined that Terra was nothing short of a typical pyramid scheme. Additionally, Ackman also warned about the broad impact of fraudulent projects on the entire crypto ecosystem.

Meanwhile, the CEO of FTX exchange Sam Bankman-Fried (SBF) looks to have a dissenting view to Toomey and the rest. SBF strongly believes that the present situation does not exactly warrant calling  Terra a Ponzi. But his opinions follow after several comparisons have been made between the failed project and a now-infamous biotech scam widely called “Theranos.” According to SBF, Terra’s case was simply borne out of massive over-anxiety.

Luna Foundation Guard In Fresh Trouble

Notably, the non-profit foundation that used to back the Terra platform — Luna Foundation Guard LFG, is currently being investigated by South Korean authorities. 

According to reports, South Korea is accusing the LFG of being involved in the mismanagement of funds. And for this reason, the authorities have now decided to freeze LFG’s assets. 

Meanwhile, several arrangements have also been made about the LFG funds before now. This was in hopes of using it to help the TerraUSD (UST) stablecoin recover its lost peg to the dollar. But even that has been largely unsuccessful so far. 

At press time, the governance token of Terra, which is LUNA remains at nearly zero. And opinions have begun to fly around if Terra’s collapse was just a mismanaged situation or a definite rug pull.

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