Matt Hougan, the chief investment officer of crypto asset management firm Bitwise, said his company has no intention of investing in the new coin. “We wouldn’t touch Luna 2.0 with a 10-foot pole,” he said in an interview.
Hougan said he does not believe stablecoins that use algorithms to keep their value can work. Rather, they need to be backed by an asset. He also believes that the new Luna coin will do little to resuscitate Kwon and Terraform Lab’s reputation within the broader community of crypto investors.
“The collapse thoroughly damaged confidence in the team,” he said. “I suspect there’s just no coming back from it.”
Hougan, however, said there could be a silver lining. Similar to 2018, when there were numerous cryptocurrency scams around initial coin offerings that prompted government scrutiny, he believes the same might happen with stablecoin regulation in the coming months.
“I suspect what comes out of this process is more regulations on the stablecoin front,” he said. “More enforcement actions from the SEC. And a stronger crypto industry as a result.”
Meanwhile, White, of Web 3 Is Going Just Great, said Kwon’s ability to mint a new cryptocurrency so soon after his previous project failed so prominently is a failure of the broader regulatory and enforcement mechanism in the crypto world. “You can just keep doing what he’s doing,” she added. “And that’s exactly what he’s doing.”
Still, she remains doubtful any broad action will happen against Kwon, even though South Korean and American regulators are looking into the collapse.
“It strikes me as unlikely that they would take any sort of broad action against these types of things,” she said. “Or any action that would actually be more impactful than just sort of whack-a-mole.”