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U.S. Senator Says Terra Investors May Be Victims of Fraud

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Mon, 05/23/2022 - 20:31
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Alex Dovbnya
Pennsylvania Senator Pat Toomey believes that the failed blockchain project may be a scam
U.S. Senator Says Terra Investors May Be Victims of Fraud
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Pennsylvania Senator Pat Toomey recently told Barron’s that Terra may be a fraudulent project.

The Republican lawmaker has pointed to the fact that Luna promised huge returns while offering “very dubious technology.”

Toomey, who recently introduced a draft bill focusing on private stablecoins, added that investors were possibly misrepresenting the nature of Terra.

Toomey, of course, is not alone. As reported by U.Today, prominent hedge fund manager Bill Ackman concluded that Terra was a typical pyramid scheme, warning that such fraudulent projects pose a threat to the entire cryptocurrency ecosystem.

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However, FTX CEO Sam Bankman-Fried opined that Terra wasn’t a Ponzi after the failed blockchain project was compared to the infamous biotech scam Theranos. He argued that the project was a case of “mass enthusiasm.”

In the meantime, South Korean authorities have reportedly moved to freeze the assets of Luna Foundation Guard, accusing Terra’s non-profit foundation of embezzlement.

Virtually all of the LFG’s funds were used in order to unsuccessfully help the TerraUSD (UST) stablecoin regain its peg.

The price of the LUNA governance token remains at virtually zero.

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About the author

Alex Dovbnya (aka AlexMorris) is a cryptocurrency expert, trader and journalist with extensive experience of covering everything related to the burgeoning industry — from price analysis to Blockchain disruption. Alex authored more than 1,000 stories for U.Today, CryptoComes and other fintech media outlets. He’s particularly interested in regulatory trends around the globe that are shaping the future of digital assets, can be contacted at alex.dovbnya@u.today.