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Yoon Chang-hyun, a spokesman for South Korea’s ruling People’s Power Party, has called for a parliamentary hearing on TerraUSD (UST) following last week’s sudden collapse of the steiblocoin, local news outlet Newspim reported Tuesday.
“We should invite relevant exchange officials, including Terra CEO Do Kwon, who recently became a problem, to the National Assembly to hold a hearing on the cause of the situation and measures to protect investors,” Chan-Hyun said today, in a plenary session of the National Assembly Political Affairs Commission.
The Terra crisis began on May 7 when UST, Terra’s algorithmic stable blockchain coin, began losing parity against the U.S. dollar. In the days that followed, UST fell below 10 cents and is still trading at that level. Terra’s own token Luna has also fallen and is currently trading below 1 cent, having lost nearly all of its value.
Chung-Hyun also wants cryptocurrency exchanges to consider their behavior during the crash.
“Coinone, Korbit and Gopax stopped trading on May 10, Bithumb stopped trading on May 11 and Upbit only stopped trading on May 13,” he said. “Upbit, which was the last to stop trading even after the collapse, is the No. 1 company with an 80% share. In just those three days, it earned about 10 billion won ($7.8 million) in commission revenue.” – Jang Hyun added.
“Emergency Checks.”
Another major Korean publication, the Yonhap news agency, reported Tuesday that local financial regulators have launched “emergency inspections” of local cryptocurrency exchanges to increase investor protection following the UST collapse, citing anonymous sources.
The Financial Services Commission of Korea (FSC) and the Financial Supervisory Service (FSS) have reportedly asked cryptocurrency exchanges to share information on transactions related to UST and Luna, including their trading volumes and the number of investors involved. The two regulators have also reportedly asked exchanges to provide their countermeasures to the UST crash and their analysis of what caused it.
“Last week, the financial authorities asked for data on transaction amounts and investors and evaluated the exchanges’ respective measures,” an anonymous employee of a local cryptocurrency exchange told Yonhap. “I think they did this to work out measures to minimize damage to investors in the future.”
Terra fork proposal.
Despite the crisis, Terraform Labs, the company behind Terra, hopes to rebuild public confidence after the collapse. On Monday, Kwon proposed splitting Terra into a new network because “Terra is more than UST.” The proposal will be voted on May 18.
“We urge Terra developers to signal support and commit to developing the fork on public channels as soon as possible,” Kwon said.
Terra investors have begun to show support for the Terra fork. Last night, Soo Joo, of Three Arrows Capital wrote on Twitter (the social network is blocked in Russia, owned by Meta – a company recognized as extremist in Russia): “Terra2 is coming soon.
Meanwhile, Binance CEO Changpeng Zhao said he doesn’t think the Terra fork will work because it has no value.
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