Two South Korean financial regulators, according to local media sources, have initiated emergency inspections of local crypto exchanges in response to Terra’s sudden collapse. A South Korean parliament member has also allegedly requested a parliamentary hearing on the matter, requesting that local exchange officials and Terraform Labs CEO Do Kwon be witnesses.
Following Terra’s historic crash, South Korea seems to be focusing on the crypto industry.
According to industry insiders quoted by the newspaper, the two regulatory bodies have requested that local crypto exchanges submit data on UST and LUNA transactions, including trade volume, price fluctuations, and the number of affected investors.
“Last week, financial authorities requested data on the number of transactions and investors, and assessed the relevant measures of the exchanges,” a local exchange official reportedly told Yonhap. “I believe they did it to draw up steps to avoid future harm to investors,” he said, adding that the agencies had also requested that the exchanges produce a full review and define their response to the situation.
Terraform Labs, a Singapore-based startup managed and co-founded by Do Kwon, created the Terra blockchain, which hosts the UST “stablecoin” and native governance token LUNA. Around May 8, its algorithmic stablecoin UST started de-pegging from its goal of parity with the dollar. Despite Terraform Labs and the Luna Foundation Guard’s attempts to halt the cascade using a Bitcoin reserve fund, UST and LUNA continued to fall over the next several days, wiping away nearly $40 billion in a week.
