South Korean Authorities Look to More Closely Scrutinize Exchanges Following Terra Meltdown: Report

Around 280,000 South Koreans are believed to have been victims of the abrupt plunge in UST and LUNA.

AccessTimeIconMay 24, 2022 at 2:14 p.m. UTC
Updated May 11, 2023 at 4:27 p.m. UTC
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South Korea's financial authorities are looking to introduce measures to hold crypto exchanges to greater scrutiny in the wake of Terra's collapse, according to a report by The Korea Times.

Crypto was on the agenda at a National Assembly emergency seminar this week. A two-day-long meeting was designed to discuss the disaster involving the Terra stablecoin UST and its sister token LUNA, which both collapsed to near zero earlier this month.

"We need to make exchanges play their proper role, and toward that end it is crucial for watchdogs to supervise them thoroughly," Rep. Sung Il-jong of the ruling People Power Party said. "When exchanges violate rules, they should be held legally responsible to ensure that the market functions well without any troubles."

Around 280,000 South Koreans are believed to have been victims of the abrupt plunge in UST and LUNA's values, according to the Korea Times.

The country's Financial Services Commission plans to build close ties with law enforcers "to monitor any illegal acts in the industry and protect investors' rights," said its vice chair, Kim So-young.

Authorities are also looking into whether Do Kwon, the CEO of Terra creator Terraform Labs and a citizen of South Korea, has perpetrated fraud in targeting investors with his crypto project.

Cryptocurrency has been prominent in political discussion in South Korea in recent months, with both candidates in March's presidential election taking crypto-friendly stances in order to appeal to younger voters.

Winning candidate Yoon Suk-Yeol pledged to deregulate the industry in order to “realize the unlimited potential of the virtual asset market.”


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Jamie Crawley

Jamie Crawley is a CoinDesk news reporter based in London.

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