Activist investor Bill Ackman weighed in on the recent Terra crisis, calling the protocol a crypto version of a pyramid scheme.
Ackman’s comments come in wake of the Terra blockchain losing most of its value in the span of a few days, as the de-pegging of its UST stablecoin cause a massive bank run.
The fact that UST offered a 20% return, with no fundamental business backing its value, is the most telltale sign of a pyramid scheme, Ackman said late-Tuesday. The protocol collapsed once LUNA suppliers surpassed buyers.
Ackman is the founder of Pershing Square Capital, a hedge fund. His boisterous and highly involved investment style has earned him the tag of an “activist investor.”
Ackman praises blockchain, calls for more self-regulation
In a Twitter thread, the Pershing Square founder praised blockchain as being a “brilliant technology,” but added that projects like Terra gave the space a bad name. To Ackman, the digitization of LUNA and the hype around the crypto market were the key reasons behind the platform’s popularity.
