Following the Terra Meltdown, South Korean authorities are looking to scrutinize exchanges more closely
According to The Korea Times, South Korea’s financial regulators are considering enacting legislation to subject crypto exchanges to tighter scrutiny in the aftermath of Terra’s demise. The National Assembly emergency seminar this week focused on cryptocurrency. The Terra stablecoin UST and its companion token LUNA both crashed to near zero earlier this month, prompting a two-day gathering to tackle the calamity.
“We need to have exchanges fulfill their rightful function, and watchdogs must carefully oversee them to that goal,” said Rep. Sung Il-jong of the ruling People Power Party. “When exchanges break the rules, they should be held legally accountable to guarantee that the market runs smoothly.” According to the Korea Times, some 280,000 South Koreans are likely to have been affected by the sudden drop in UST and LUNA prices.
According to its vice-chair, Kim So-young, the country’s Financial Services Commission aims to strengthen relations with law enforcement “to monitor any criminal conduct in the business and defend investors’ rights.” Authorities are also investigating whether Do Kwon, the CEO of Terra developer Terraform Labs and a South Korean citizen, used his crypto project to defraud investors.
In recent months, cryptocurrency has been a hot topic in South Korean politics, with both presidential contenders in March expressing crypto-friendly positions in order to appeal to younger voters. Yoon Suk-Yeol, the winning candidate, promised to de-regulate the business in order to “realize the virtual asset market’s boundless potential.”