But amid its ups and downs, the release has drawn fierce scrutiny from cryptocurrency analysts, investors and critics. It highlights a broader issue with the cryptocurrency market, they said: Companies can sell what they want with little worry about regulation or enforcement — putting everyday investors most at risk.

“It’s the little guy who’s being sold false promises [and] who’s getting absolutely torn apart by this,” said Molly White, a software developer who runs the website Web 3 Is Going Just Great. “It’s just an enormous failure on the part of regulators.”…

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.”