A breed of cryptocurrencies touted for their purported stability has come under scrutiny as regulators, individual investors and veteran digital asset traders watched one spiral from its $1 peg to pennies. 

The recent fall of TerraUSD and its sister stablecoin Luna saddled investors with billions of dollars in losses and ricocheted back into other cryptocurrencies. Their plunge has raised urgent questions about the regulation of digital assets, and undermined crypto developers’ claims they could create a new form of finance not marred by the destabilizing bank runs that occasionally happen in traditional finance.