The collapse of the Terra cryptocurrency ecosystem has led to a negative attitude towards cryptocurrencies in political circles

Jake Czerwinski, executive vice president and chief policy officer of the Blockchain Association, reflected on Twitter yesterday on how the collapse of Terraform Labs and the problems with its founder Do Kwonare affecting regulatory policy toward cryptocurrencies. According to the official, Terra’s failure is forcing the regulator to establish strict supervision over the digital asset market.

It’s hard to overstate the damage that Terra has done to the perception of crypto in DC.

Many policymakers already disliked the notion of a permissionless digital marketplace and wanted to put all of crypto in a well-sealed box.

Terra gave them (un)just cause to push forward.

— Jake Chervinsky (@jchervinsky) September 19, 2022

By the way, this is not the first loud (and quite possibly ill-considered) statement by Chervinsky in recent times. At the end of April, the Blockchain Association opposed the cryptocurrency sanctions imposed by the United States on Russians due to full-scale military aggression against Ukraine. At that time, the head of the BBA policy department stated that the bills of the US authorities were not directed against Russian oligarchs, but against American cryptocurrency companies.

Blockchain firm TerraformLabs is involved in a criminal case for fraud and tax evasion. After the TerraUSD (UST) token crashed in June 2022, the LUNA 2.0 cryptocurrency token dropped in value by as much as 85%. In early July, law enforcement agencies in South Korea and the United States agreed to cooperate in investigating the Terra ecosystem. Do Kwon and Terraform Labs are still the subject of many lawsuits. Currently, South Korean authorities are considering revoking Do Kwon’s passport and terminating his citizenship. The country’s prosecutor’s office even asked Interpol to issue a red notice to the Terraform Labs CEO. This happened after Singapore confirmed the information that the developer had left the country, although Kwon claimed that he had no intention of fleeing from law enforcement.