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The Financial Services Commission of South Korea (FSC) and the Financial Supervisory Service (FSS) are trying to prevent the Terra situation.
Authorities in South Korea have launched emergency inspections of local cryptocurrency exchanges, Yonhap reports. The purpose of the checks is to protect investors from a repeat of what happened to TerraUSD (UST) and its managing token LUNA.
According to an unnamed representative of a South Korean cryptocurrency exchange operator, financial authorities have asked 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 seeking to develop measures to minimize damage to investors in the future.
As a reminder, last week the Terra network, developed by Singapore-based Terraform Labs, collapsed when the UST stalkcoin’s peg to the dollar broke. UST nearly depreciated, dropping to $0.15, and the price of the control token LUNA plummeted to nearly zero. According to Yonhap, about 200,000 investors in South Korea invested in TerraUSD and LUNA.
A spokesman for financial regulators, commenting on the situation, said there is little the South Korean government can do in terms of protecting investors at this time, as this is entirely a private sector matter. However, the financial authorities are monitoring the situation and will try to issue some kind of regulations and guidelines to prevent such situations in the future.
It was previously reported that the South Korean government will require cryptocurrency exchanges to disclose the sender and recipient of transactions of $820 or more, in accordance with FATF recommendations.
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