US Senator Says Terra Investors May Be Fraud Victims

Alex Dovbnya

Pennsylvania Senator Pat Toomey Believes Failed Blockchain Project Could Be a Scam

Pennsylvania Senator Pat Toomey recently told Barron’s that Terra may be a fraudulent project.

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

Toomey, who recently filed a draft bill targeting private stablecoins, added that investors may be misrepresenting the nature of Terra.

Of course, Toomey 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.

However, FTX CEO Sam Bankman-Fried opined Terra was no 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.”

Meanwhile, the South Korean authorities Reportedly moved to freeze Luna Foundation Guard’s assets, accusing Terra’s nonprofit foundation of embezzlement.

Virtually all of the LFG’s funds were used to help the TerraUSD (UST) stablecoin get its peg back to no avail.

The price of the LUNA governance token remains close to zero.

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