South Korean exchanges will face closer supervision after Terra’s collapse and will likely be held legally accountable for violating anti-money laundering rules as per a Korean governemnt official so let’s read more today in our latest cryptocurrency news.
After thousands of investors became victims of the collapse of the Terra stablecoin and the LUNA token, the regulators in South Korea are planning to enhance the monitoring of local exchanges and introduce legal safeguards in the industry. The Korea Times reported.
“We need to make exchanges play their proper role, and toward that end, it is crucial for watchdogs to supervise them thoroughly. When exchanges violate rules, they should be held legally responsible to ensure that the market functions well without any troubles.”
The South Korean exchanges will face closer supervision while representatives from platforms such as Upbit, Bithumb, Coinone, Korbit, and Gopax attended a meeting with the Financial Services Commission Vice Chairman Kim So-Yong and other officials:
“We are going to build close ties with the Ministry of Justice, the prosecution and police, in a bid to monitor any illegal acts in the industry and protect investors’ rights.”
Terra’s UST stablecoin relied on the algorithm to maintain a peg to the US dollar but then crashed earlier this month and sparked turmoil in the markets. About 280,000 Korean investors were estimated to have become victims of the crash of the stablecoin. The reports from the local outlet Newspim, the ruling party member and chairman of the Parliament special virtual assets committee, Yoon chang-Hyeon questioned how the exchanges responded to the events around Terra. He suggested that the high transaction fees and trading volumes encourage platforms to keep the UST and LUNA trades open despite customer risks.
The country’s financial Services Commission joined forces with the Financial Supervisory Service to launch an emergency inspection into the local exchanges that ask for data on a number of transactions as well as investors. Newspim reported that the police requested that all exchanges freeze funds associated with the Luna Foundation Guard that oversaw TErra’s ecosystem and operations. The request was not enforceable by law but each exchange can decide how to respond. Last week, LFG reported that the BTC reserves dropped by $80,000 BTC over a week ago and the entity was trying to defend its stablecoin peg. After the network crash, investors in South Korea took legal action against the Terraform Labs founder and CEO Do Kwon.
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