Billionaire Sam Bankman-Fried, who is the co-founder and CEO of crypto exchange FTX, says that Terra’s stablecoin collapse was a case of “mass enthusiasm” rather than deceit.
In a series of tweets, the 30-year-old FTX CEO, whose nickname is “SBF”, tackled TerraUSD’s price collapse. The stablecoin, supposedly pegged to the value of $1, plunged to an all-time low of around $0.04 (on May 13), and contributed to a massive selloff in the crypto markets.
SBF pushed back on comparisons between Terraform Labs co-founder and CEO Do Kwon and Elizabeth Holmes, the infamous founder of now-defunct Theranos.
While SBF admitted the TerraUSD stablecoin failed badly, he argued that Terraform Labs had been transparent from the start. Unlike Holmes, who received four guilty charges for her role in Theranos’s deception, SBF said that Kwon and his team did not misrepresent $UST to the public.
Instead, SBF said Kwon’s mistake was standing by the stablecoin “long after he should have backed off.”
According to SBF, Kwon never claimed that $UST was backed by 1:1 with dollars, instead saying that it was backed by a “bunch of volatile assets.” SBF said he did not want to condone the actions of Do Kwon, but noted that it was “very publicly clear that those assets might go down.”
Ultimately, SBF concluded that Terra’s story was a case of “mass enthusiasm, excitement, and–frankly–marketing and memes.” He said the stablecoin’s hype drove people to believe in the asset, despite the fact that it was likely destined to falter based upon information that was made publicly available from the start.
The views and opinions expressed by the author, or any people mentioned in this article, are for informational purposes only, and they do not constitute financial, investment, or other advice. Investing in or trading cryptoassets comes with a risk of financial loss.