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According to local media reports, the South Korean government plans to summon Terra founder Do Kwon to a parliamentary hearing on Terra’s collapse.
Terra’s collapse sparked investor outrage as well as calls by several governments for stronger regulation of cryptocurrencies.
Politician Yoon Chan-hyun reportedly raised the issue of Terra’s recent collapse at a plenary session. He pointed to the uncertain behavior of cryptocurrency exchange platforms during the collapse. Major Korean exchanges Coinone, Korbit and Gopax, stopped trading UST and LUNA on May 10, while Bithumb and Upbit did so on May 11 and 13, respectively.
Yoon suggested calling representatives of the crypto exchanges and Do Kwon to investigate why the ecosystem collapsed. He also raised the need for measures to protect investors.
Terra’s UST Stablecoin had a market capitalization of more than $18 billion. UST now trades at an average price of $0.124. After the collapse, its market capitalization dropped to $1.4 billion.
Yoon noted that every trade in the marketplace helps the platform earn commissions from them. During the market crash, Upbit was the last platform to stop trading for LUNA. The exchange ranked first in commission revenue with a share of 80 percent. He advocated strict regulation of the cryptocurrency market because investors were suffering huge losses due to its lack of regulation.
South Korea’s financial authorities have already launched an investigation into cryptocurrency exchanges. The Financial Supervisory Service (FSS) and the Financial Services Commission (FSC) have asked exchanges to provide detailed information on transactions with UST and Luna. The report will also include trading volumes with the number of investors and closing prices.
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