The FIU report reveals that a large number of Terra holders was significant to the collapse of the ecosystem and which further led to thorough scrutiny of crypto exchanges.
The Financial Intelligence Unit (FIU) of South Korea’s Financial Services Commission revealed on Tuesday that Terra LUNA and UST holders increased significantly after the crash, hoping for a price recovery.
According to local media reports, the South Korean government is now taking additional precautions to avoid another Terra-like crash. The collapse of Terra’s UST stablecoin and LUNA in early May cost investors worldwide billions of dollars.
During the “Emergency Check on Digital Assets Basic Act and Coin Market Investor Protection Measures” meeting at the National Assembly on May 24, South Korea’s Financial Intelligence Unit reported the number of users affected by the collapse. According to the FIU report, South Korea currently has 280,000 investors holding nearly 80 billion tokens. On May 6, there were only 100,000 users with 3.17 million tokens.
Kim So-young, deputy chief of the Financial Services Commission, told local media outlet Naver:
“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, during the “Enactment of the Digital Asset Framework Act and Emergency Inspection of Coin Market Investor Protection Measures” meeting, South Korea’s Financial Supervisory Service (FSS) revealed plans to analyze and manage the risks of the UST and LUNA crashes.
The FSS will inspect companies that provide financial services related to the Terra project on-site. The inspection will look into the service’s upkeep, the status of withdrawal funds, and the effectiveness of user protection measures.
Furthermore, the Financial Supervisory Service intends to assess the risk of virtual assets while also monitoring domestic and international virtual asset markets. The authority emphasizes the significance of crypto market monitoring, citing Terra’s demise as a result of a weak algorithm, mass short-selling attacks, and a lack of LFG support.
After Terra’s collapse, cryptocurrency exchanges are being scrutinized.
The South Korean government and agencies are looking into the role of cryptocurrency exchanges in the Terra crash, following reports that exchanges ignored investor protection. The Fair Trade Commission (FTC) announced today that it will investigate whether crypto exchanges are using fair terms and conditions. The FTC recommended last year that 16 exchanges, including Dunamu (Upbit), Bithumb Korea, Streamy, Oceans, Korbit, and Coinone, fix the unfair terms and conditions provisions.
