The crash of the stablecoin TerraUSD (UST) wiped out over $50 billion and continued to sweep the entire crypto market with it. Numerous investors had to accept a total loss, especially South Korea recorded many injured investors. Because the now hyperinflationary LUNA coins are now almost worthless. Investors are actively burning their coins in hopes of stabilizing the price again. Opinions regarding a hard fork planned by Do Kwon are divided. Government agencies hold emergency conferences. To put it in a nutshell: chaos reigns.
Emergency Conference in South Korea
The debacle not only raised questions about the reliability and sustainability of algorithmic stablecoins raised, but also increased the urgency of regulating the market. According to one Korea Times report South Korean regulators want to tighten scrutiny and surveillance of crypto exchanges in light of the disaster.
A two-day emergency conference was created for this purpose, which ended on Tuesday, May 24th. The meeting was also attended by heads of the country’s five largest stock exchanges, as well as senior government officials, including Financial Services Commission (FSC) vice-chairman Kim So-young.
The most important statements at a glance
After the LUNA scandal made headlines around the world, the investigating authorities took over the company Terraform Labs examined more closely. According to the Seoul City Police Cybercrime Unit, the agency requested an asset freeze for an employee suspected of embezzling company funds. That’s why Kim So-young announced at the conference that he wants the authorities to work more closely together.
We will work closely with the Ministry of Justice, prosecutors and police to monitor any illegal activity in the industry and protect investors’ rights.
Kim So-young, Deputy Financial Services Commission (FSC)
According to a report by Yonhap News Agency, So-young also said that the country needs to step up international cooperation to effectively regulate the digital asset market given its decentralized nature.
In order to develop effective regulatory systems for crypto assets, we will closely examine cases of regulations abroad and strengthen cooperation with international organizations and key countries.
Kim So-young, quote from the conference report
The FSC, the Financial Intelligence Unit and the Financial Regulator are currently reviewing Terra’s white paper and other documents. This is done to determine the cause of the collapse and the extent of the damage, and to prevent a recurrence.
Investors in South Korea have lost everything
Last week, LKB & Partners, a Seoul-based law firm, sued Kwon and the company’s other co-founder, Shin Hyun-sung, in the Seoul Southern District Court. The lawyers appear to have been invested in Terra (LUNA) themselves and are representing victims of the LUNA -Fiascos.
Given the legal ambiguity in the crypto industry, it remains to be seen whether investors in the Terra ecosystem can receive financial compensation. Other voices from the crypto community are currently campaigning for compensation. So does Vitalik Buterin, the founder of the ETH network.
That’s what Vitalik Buterin says about the Terra crash
Twitter user PersianCapital made the following suggestion on the social media platform:
The second option is to prefer smaller wallets. People who have deposited a few thousand or more into UST anchors.
If Terra only focused on the “poorest” 99.6% of wallets, they could compensate this gargantuan group 100%.
Twitter user @PersianCapital
Then affirm Vialik Buterin his idea and replied to him on Twitter.