- Lawmakers are seeking to fully understand the situation and protect investors
- Authorities requested that Terra’s CEO Do Kwon appear at a hearing
- Representatives from Korea’s big four are also expected to give an account
- The development follows LUNA’s historical crash from its ATH of $120 to pennies
- Terra’s native token slumped after the algorithmic stablecoin UST lost its peg
Authorities in South Korea have requested for Terra’s CEO Do Kwon to appear before lawmakers and give an account of the events behind LUNA’s massive price crash.
According to a report from local news outlet NEWSPIM, Korean legislators are aiming to protect investors from further damage by investigating the incident and developing a full understanding of what really happened.
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The report also explains that authorities invited representatives from Korea’s “big four” – Bithumb, Coinone, Korbit, and Upbit, as well as other local exchanges. These platforms are expected to detail their actions as the LUNA crash happened.
EWN previously reported that major South Korean exchanges designated Terra’s coins as cautionary items following a significant drop in market prices and market uncertainty after UST failed to reclaim its $1 peg.
Yoon Chang-Hyeon of the People’s Power Party pointed out that the local crypto exchanges chose to halt trading support for Terra’s tokens at different times, and emphasized that platforms must give reasons behind these decisions.
We should bring related exchange officials, including CEO Kwon Do-Hyung of Luna, which has become a recent problem, to the National Assembly to hold a hearing on the cause of the situation and measures to protect investors.
Financial Authorities Step In As LUNA Debacle Continues
Sources also revealed that two of Korea’s top regulatory bodies – the Financial Services Commission (FSC) and Financial Supervisory Service (FSS) have launched an official investigation into the matter.
The agencies reportedly started an “emergency inspection” and requested relevant information from domestic crypto exchanges. Yonhap news cited an industry source who claimed:
Last week, financial authorities asked for data on the amount of transactions and investors and sized up the exchanges’ relevant measures. I think they did it to draw up measures to minimize the damage to investors in the future.
While authorities attempt to take action following the LUNA crash, legal regulatory authority remains limited as policies designed to provide crypto oversight do not come into effect until 2024, per reports.
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