Following the impressive loss of value of the Terra blockchain tokens, the LUNA and the UST stablecoin a considerable number of individuals were impacted, most having lost significant sums of money.The repercussions have also spread throughout the ecosystem both at the level of exchanges and decentralized finance (DeFi) protocols.
The consequences are such that they will now beyond the cryptocurrency ecosystem alone .We have just learned that South Korean financial regulators, in particular the Financial Services Commission (FSC) and the Financial monitoring service (FSS) have decided to get involved.
Indeed, Do Kwon the CEO and co-founder of Terraform Labs, the parent company of Terra, is a South Korean national although Terraform Labs’ offices are based in Singapore.
Also, according to sources from the various South Korean exchanges, the 2 regulatory entities mentioned above have asked local cryptocurrency service providers to share information about their transactions relating to the LUNA token and the UST.
The exchanges concerned were thus led to share, among other things, the respective trading volumes of the two tokens, their closing prices and the number of investors concerned by their fall .In addition, the authorities asked them to draw up their own analysis of the situation, and if they had taken countermeasures to limit the damage concerning the investors .
👉 Related: Why did the UST stablecoin collapse and what is the future of the Terra ecosystem? More regulation to protect users?
According to an anonymous source working for one of the platforms concerned, financial regulators wish above all to prevent such a situation from reoccurring :
“Last week, financial authorities requested data on the amount of transactions and investors, and measured the concrete measures of the exchanges.I believe they did this to craft measures to minimize damage to investors in the future.»
According to Jeong Eun-bo , the head of the Financial Monitoring Service, recent events could have a major impact on the confidence of investors around the world vis-à-vis the market as a whole.He adds that despite a lack of clear regulations concerning cryptocurrencies, the organization must still figuring out the ins and outs of Terra’s fall .
Finally, according to him, it is now essential that the regulatory authorities of all countries jointly study a suitable way to regulate the entire cryptocurrency market .
In the same media, a representative of a financial organization specifies that the government cannot, for the moment, than acting as a mere observer :
“Regarding the Luna incident, we are monitoring the general development of the situation, but there is no direct action the government can take at this time.There is no reason for the government to intervene because cryptocurrency transactions are operated freely by the private sector.
» Do Kwon soon in front of the commission?
Yun Chang Hyun a politician who is a member of the ruling government, the Conservative Party of power to the people expressed the wish to organize a parliamentary hearing concerning the events attributed to Terra, and this in the presence of Do Kwon :
“We should bring relevant exchange officials, including Do Kwon, the CEO of Terra who has become a recent issue, to the National Assembly to hold a hearing on the cause of the situation and measures to protect investors..»
However, Do Kwon seems to want to try to raise the bar, the latter having proposed this Monday, May 16 to operate a hard fork of the Terra blockchain and create a new LUNA token.
An initiative far from being unanimous, since to date, 90% of voters chose to respond negatively to the proposal of Do Kwon, the majority preferring in particular a burn of surplus LUNA tokens.
👉 Related: Do Kwon Submits Terra (LUNA) Fork Proposal to Community Vote
Sources: Yonhap (1), Yonhap (2), Watcher Guru
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Get a crypto news recap every Sunday 👌 And that’s it.About the Author : Maximilien Prue Passionate about the world of decentralized finance and the novelties brought by Web 3.0, I write articles for Cryptoast to help make the blockchain more accessible to everyone.Convinced that cryptocurrencies will change the future very soon.All articles by Maximilien Prué.
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