South Korea’s Financial Services Commission’s Financial Intelligence Unit (FIU) on Tuesday revealed LUNA and UST holders increased massively after the crash, hoping for a rebound in prices.
The South Korean government is now implementing additional measures to prevent another Terra-like crash, according to local media reports. The collapse of Terra’s UST stablecoin and LUNA in early May caused investors across the world to lose billions.
South Korea Investigates the UST and LUNA Collapse
South Korea’s Financial Intelligence Unit during the “Emergency Check on Digital Assets Basic Act and Coin Market Investor Protection Measures” meeting at the National Assembly on May 24 reported the number of users impacted by the collapse. The FIU report revealed that South Korea currently has 280,000 investors holding nearly 80 billion tokens. Whereas on May 6, there were only 100,000 users holding 3.17 million tokens.
Kim So-young, deputy chief of the Financial Services Commission, told local media outlet Naver:
“In order to draw up effective regulatory systems on crypto assets, we will closely review overseas cases of regulations and strengthen cooperation with international organizations and major countries.”
Meanwhile, South Korea’s Financial Supervisory Service (FSS) during the “Enactment of the Digital Asset Framework Act and Emergency Inspection of Coin Market Investor Protection Measures” meeting revealed plans to analyze and manage the risks of the UST and LUNA crash.
The FSS will conduct on-site inspections of companies providing financial services related to the Terra project. The inspection will check the maintenance of the service, the status of withdrawal funds, and the effectiveness of user protection measures.
Moreover, the Financial Supervisory Service plans to analyze the risk of virtual assets, along with monitoring domestic and foreign virtual asset markets. The authority asserts the importance of crypto market monitoring as a weak algorithm, mass short-selling attacks, and lack of LFG‘s support led to Terra’s collapse.
Crypto Exchanges Under Scrutiny After Terra’s Collapse
South Korean government and agencies are investigating crypto exchanges’ role in the Terra crash after reports emerged that exchanges ignored investor protection. The Fair Trade Commission (FTC) today said it will check whether crypto exchanges are complying with fair terms and conditions. Last year, FTC recommended that 16 exchanges, including Dunamu (Upbit), Bithumb Korea, Streamy, Oceans, Korbit, and Coinone, rectify the unfair terms and conditions provisions.
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