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The Wall Street Journal: TerraUSD crash led to vanished savings and shattered dreams


TerraUSD was touted as a blue-chip cryptocurrency. Now its investors are reeling from painful losses and asking if it was all a get-rich-quick scheme.

A surgeon in Massachusetts can’t stop thinking about how he lost his family’s nest egg. A young Ukrainian considered suicide after losing 90% of his savings. Other investors have given up dreams of starting new businesses or quitting their day jobs.

All of them were swept up in the mania for TerraUSD, whose total value swelled to $18 billion before collapsing earlier this month. The coin’s sudden downfall is a reminder that crypto—which enjoyed a huge bull market last year—is often little more than a casino, with weak regulation and few means of recourse for the losers.

The crash caught many investors off guard because TerraUSD was a stablecoin, designed to maintain its value of $1 per coin. Unlike bitcoin, which has crashed repeatedly in its short history, TerraUSD was pitched as a harbor from volatility. It slipped below $1 earlier this month and was trading around 8 cents on Thursday.

Investors piled into TerraUSD because of the opportunity to make money in Anchor Protocol, a sort of crypto bank that offered annual yields of nearly 20% on deposits of the coin. Critics questioned whether Anchor’s yields were sustainable. But such eye-popping interest rates are common in decentralized finance, or DeFi, a sort of parallel financial system for crypto with its own version of banks and lending.

An expanded version of this story appears on

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