Bill ackman, an American hedge fund tycoon, commented on the collapse of Terra's "stable currency", calling it a "cryptocurrency version of the pyramid scam" The CEO of Pershing square capital management stated this position on twitter on Tuesday. "When I read Terra's' algorithm ', it sounds like a cryptocurrency version of a pyramid scam. Investors are promised a 20% return, supported by a token whose value is only driven by the demand of new investors for this token. There is no underlying business," he wrote
Ekman's comments came after the shocking cryptocurrency crash last week, wiping out hundreds of billions of dollars in market value. The collapse was partly due to the collapse of Terra, which is linked to the dollar. After decoupling from the US dollar, the "stable currency" fell freely and fell to a low of US $0.30 on Wednesday.
Terra's sister cryptocurrency Luna also plunged by more than 97%, which analysts call the "death spiral".
Ekman also criticized Luna on Tuesday, saying it appreciated "by attracting more followers" and limiting supply. The system crashes when sellers far outnumber buyers, Ackerman said.
Ekman added that although blockchain is an "outstanding technology with great potential", encryption scams such as Luna may also damage the entire encryption ecosystem.
"The encryption industry should regulate itself and stay away from other encryption projects without a fundamental business model, otherwise strict regulation will ruin both the good and the bad," he wrote "Hyping tokens that are not supported by value creating enterprises will destroy the entire cryptocurrency industry."