South Korean regulators are expected to hold local crypto exchanges responsible for failing to protect investors from Terra’s meltdown.
Key Takeaways
- South Korea’s ruling party is reportedly set to meet the five biggest local crypto exchanges on Tuesday to discuss Terra’s collapse.
- The authorities could hold the exchanges responsible for failing to protect investors during the crash.
- Regulatory agencies are also conducting emergency probes into all domestic crypto-related businesses following Terra’s implosion.
South Korea’s ruling party has reportedly arranged an emergency meeting to take place Tuesday with representatives from the country’s five largest cryptocurrency exchanges. The authorities are expected to hold the exchanges responsible for failing to protect investors during Terra’s collapse.
South Korea Continues Probes Into Terra Crash
South Korean crypto exchanges could be held responsible for some of the damage Terra investors suffered due to the network’s collapse.
According to a Monday report from the local outlet Newspim, South Korea’s ruling party has scheduled a May 24 emergency party meeting with representatives from the top five local crypto exchanges, including Upbit, Bithumb, Coinone, Korbit, and Gopax, to discuss the consequences of Terra’s $40 billion collapse. Per the report, it is expected that the exchanges will be held accountable for failing to implement adequate investor protections and prevent damages to their clients during the crash.
“We will check [the exchanges’] investor protection measures,” Yoon Chang-Hyeon, a member of South Korea’s ruling party and chairman of the parliament’s special virtual assets committee, said in a Monday Facebook post. Previously, Chang-Hyeon, who pushed for an emergency National Assembly hearing on Terra last Tuesday, raised questions regarding the local exchanges’ response to Terra’s collapse, implying that high trading volumes and transaction fees may have incentivized the exchanges to keep LUNA and UST trading open despite the apparent risks for their customers.
In the meantime, South Korea’s financial regulators are conducting emergency probes into all 34 crypto-related businesses in the country, including 26 crypto exchanges and eight crypto wallet and security management companies. According to Newspim, they are assessing whether the exchanges have adequately implemented all necessary anti-money laundering and investor protection mechanisms.
According to local news sources, Terraform Labs CEO Do Kwon, who has reportedly been invited to the emergency party hearing, is under investigation by the Seoul Southern District Prosecutors Office on suspicions of running a Ponzi scheme by promoting unsustainable yields on UST deposits via Anchor Protocol. The investigation comes after South Korean investors announced their plans to Kwon and his co-founder, Daniel Shin, for fraud and other financial violations over Terra’s collapse.
Disclosure: At the time of writing, the author of this piece owned ETH and several other cryptocurrencies.
The information on or accessed through this website is obtained from independent sources we believe to be accurate and reliable, but Decentral Media, Inc. makes no representation or warranty as to the timeliness, completeness, or accuracy of any information on or accessed through this website. Decentral Media, Inc. is not an investment advisor. We do not give personalized investment advice or other financial advice. The information on this website is subject to change without notice. Some or all of the information on this website may become outdated, or it may be or become incomplete or inaccurate. We may, but are not obligated to, update any outdated, incomplete, or inaccurate information.
You should never make an investment decision on an ICO, IEO, or other investment based on the information on this website, and you should never interpret or otherwise rely on any of the information on this website as investment advice. We strongly recommend that you consult a licensed investment advisor or other qualified financial professional if you are seeking investment advice on an ICO, IEO, or other investment. We do not accept compensation in any form for analyzing or reporting on any ICO, IEO, cryptocurrency, currency, tokenized sales, securities, or commodities.
Terra’s Do Kwon Investigated for Running a Ponzi: Report
South Korean prosecutors are reportedly weighing whether they could charge Do Kwon for running a Ponzi scheme by promising unsustainably high fixed interest rates on UST deposits via Anchor Protocol….
Terra Investors Reportedly Preparing to Sue Do Kwon for Fraud
The South Korean law firm LKB & Partners is reportedly preparing to sue Terraform Labs co-founder and CEO Do Kwon for fraud on behalf of investors financially harmed by Terra’s…
South Korean Authorities Commence Probes Into Terra Crisis
According to local media reports, two South Korean financial agencies have launched emergency inspections into local crypto exchanges in response to Terra’s dramatic collapse. A South Korean parliament member has…
