Terra Luna and TerraUSD's algorithmic operations were all disclosed publicly and scrutinized in the open sphere
Do Kwon stated publicly why he was buying the bitcoin - to repurchase Terra Luna and TerraUSD because its shitty broken product that might need to be rebought to temporarily help restore its peg - and Do Kwon has stated publicly now why the bitcoin sold - to repurchase Terra Luna and TerraUSD because its shitty broken product that might need to be rebought to temporarily help restore its peg
I think in a regulated market he just walks away just like all investment banks and bankers do
There are plenty of Exchange Traded Notes (ETNs) that obtusely say "this is dogshit and its going to fall to zero during a period of volatility" and then fall to zero during a period of volatility
Thats exactly what Terra Luna and TerraUSD did
all regulation would do is standardize the way the disclosure is done, really the most likely thing that comes from this is a regulator mandated additional sentence in a brokerage firm's 40 page disclaimer that you surely will read after consulting your financial advisor.
Its up to the consumer/investor, it always is.
I don't disagree that there are ETNs that work generally as you describe.