The digital currency ecosystem was witness to the collapse of the Terra protocol and its associated cryptocurrencies including LUNA and algorithmic stablecoin, UST.
The events which have left many people, investors, and DeFi protocols in debt have been seen as enough grounds for the South Korean Financial Services Commission (FSC) and the Financial Supervisory Service (FSS) to launch an ‘emergency’ investigation into the position of trading platforms.
According to insider reports, “Last week, financial authorities asked for data on the amount of transactions and investors, and sized up the exchanges’ relevant measures,” as gleaned by Yonhap, with the source claiming that the authorities did what they did “to draw up measures to minimize the damage to investors in the future.”
It is yet unclear what these measures can be, but the findings revealed that there are at least 200,000 investors who saw the Terra ship sunk as the price of LUNA tended toward zero and UST failed to maintain its intended peg to the US Dollar.
South Korea Concerned About Investors
There is no doubt that many regulators, South Korea’s inclusive, are concerned about investors as the broader crypto ecosystem is feeling the ripple effect of the Terra crash. The authorities as gathered by Yonhap said they are currently monitoring the situation, even though it is too late for any direct response from the government at this time.
“In regards to the Luna incident, we are monitoring the overall situational changes, but there isn’t a direct measure the government can take at this moment,” a spokesperson for the financial authorities told Yonhap. “There is no ground for the government to intervene because coin transactions are being freely operated by the private sector.”
The turn of events in recent times is likely bound to stir a new wave of regulation in the Asian country. Also, it can spark the acceleration of projected regulations through the “Digital Asset Basic Act,” which will see the government impose as much as a 20% tax on crypto products.