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South Korean Authorities Intensify Crypto Regulations to Prevent Terra (LUNA) Recurrence

2 mins
Updated by Ryan James
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In Brief

  • Authorities in South Korea have begun intensifying their regulatory efforts on the back of Terra’s crash.
  • The government has launched a Digital Assets Committee tasked with overseeing crypto exchange activities in the country.
  • Financial regulators in the Asia-Pacific region are collaborating for better regulations of the industry.
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South Korea’s Financial Supervisory Service (FSS) has opened investigations into payment gateway services working with digital assets. 

According to local media reports, the FSS asked 157 payment gateways to provide information about their services involving crypto, disclosure of digital assets, and their plans. However, the FSS reported that only 6 payment gateways held digital assets.

The request comes only a few days after the government announced that it is launching a Digital Assets Committee. This is in reaction to the recent crash of Terra’s ecosystem, which left many with losses running into billions.

Per available information, there will be new guidelines for the crypto industry which would include screening criteria before listing a new asset, trade monitoring, market monitoring, disclosure standards, etc.

The top exchanges in the country have also established their committees to prevent another Terra-like crash event.

Terra’s Crash is Drawing More Regulatory Interest

Additionally, the FSS had a remote meeting with other financial regulators in the Asia-Pacific region. Authorities from China, Japan, and Australia were also part of the meeting hosted by the Indonesian Financial Supervisory Service.

During the meeting, the South Korean representative said there’s a need for cryptocurrency regulation, expansion of the regulatory framework, and disciplinary action.

All these regulatory moves are due to the seismic impact of the Terra-LUNA collapse. Although some investors have already moved on, authorities all over the world consider it a wake-up call to toughen regulations around crypto.

South Korean authorities are also investigating Terraform Labs, the company behind the network. Reports claim that the Seoul Southern District Prosecutor’s Office’s joint financial and securities crime investigation team has summoned every Terraform Labs employee.

Authorities are looking for signs of intentional price manipulation and believe that the company knew the collapse would happen eventually. According to reports, an anonymous former employee of the company has already testified to that effect.

Some investors have also filed claims against the founders of the network, Daniel Shin and Do Kwon.

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In adherence to the Trust Project guidelines, BeInCrypto is committed to unbiased, transparent reporting. This news article aims to provide accurate, timely information. However, readers are advised to verify facts independently and consult with a professional before making any decisions based on this content.

Oluwapelumi Adejumo
Oluwapelumi believes Bitcoin and blockchain technology have the potential to change the world for the better. He is an avid reader and began writing about crypto in 2020.