Wall Street Investor Compares the Terra Case to a “Pyramid Scam”
- A millionaire Wall Street investor suggested that the crypto asset market could be operating like a huge Ponzi scheme, since cryptos do not have any backing.
- Through his Twitter (NYSE:) account, the CEO of Pershing Square Capital Management, Bill Ackman, warned that some cryptocurrencies harm the crypto ecosystem.
“When I read about the ‘algorithm’ of @terra_money it sounds just like a crypto version of a pyramid scheme,” commented Bill Ackman, the CEO of Pershing Square Capital Management, a Wall Street hedge fund management firm, on Twitter after the collapse of stablecoins in recent days.
Akcman said that “investors were promised a 20% return backed by a token whose value depends solely on demand from new investors in the token,” referring to the USD crash last week.
“There is no fundamental underlying business” behind cryptocurrencies, the American investor added to argue his thesis.
Ackman’s comments were published a few days after the general cryptocurrency crisis also dragged down stablecoins, which had been stable until a month ago.
The collapse of Terra USD and its entire ecosystem caused a general loss of about 30,000 million dollars, among the 200 thousand investors who believed in the project created by Terraform Labs.
As of mid-April, Terra USD was the third-largest stablecoin by market cap and was trading at $119 to drop on Wednesday (5:04 pm ET) to $0.09612 cents,…
