The South Korea Financial Services Commission (FSC) and the Financial Supervisory Service (FSS) are trying to prevent the situation with Terra.
The South Korean authorities began emergency checks of local cryptocurrency exchanges, informs Yonhap edition. The purpose of the checks is to protect investors from repeating what happened with the stablecoin TerraUSD (UST) and its governing token LUNA.
According to an unnamed representative of the South Korean cryptocurrency exchange operator, financial authorities have asked the exchanges for data on transaction amounts and investors, as well as what security measures the companies apply to their users. The source is confident that financial regulators are trying to develop measures to minimize damage to investors in the future.
Recall that last week, the Terra network, developed by the Singaporean company Terraform Labs, collapsed when the peg of the UST stemcoin to the dollar broke. UST has practically depreciated, falling to $0.15, while the price of the LUNA governance token has dropped to almost zero. According to Yonhap, around 200,000 investors in South Korea have invested in TerraUSD and LUNA.
The representative of financial regulators, commenting on the situation, said that the South Korean government can do little in terms of protecting investors at the moment, since this is entirely related to the private sector. However, the financial authorities are monitoring the situation and will try to issue some regulations and recommendations to prevent similar situations in the future.
Earlier it became known that the South Korean government will oblige cryptocurrency exchanges to disclose information about the sender and recipient of transactions in the amount of $820 or more, in accordance with the recommendations of the FATF.