In the past weeks, the largest algorithm stablecoin, TerraUSD, unraveled, sending waves across the crypto world, an event that wiped out many cryptocurrency investors’ savings.
And since the Terra collapse, there have been several analyses on why Terra’s downfall; like many crypto investors, regulators across the globe have expressed their concerns, thereby leading to several theories by many analysts.
However, South Korea’s ruling party and regulators have taken this event as a burden. Their moves are looking to protect the interest of TerraUSD stablecoin and its native token investors.
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South Korea Continues Terra Crash Probes
According to the report from the South Korean local media, South Korea’s cryptocurrency exchange companies could be held responsible for part of the damages the investors suffered from the Terra USD investors.
A report from the local media outlet, Newspim, says that South Korea’s ruling party is set to call for an emergency meeting on May 24 with representatives from the country’s top cryptocurrency exchange companies, namely; Upbit, Bithumb, Coinone, Korbit, and Gopax. A meeting scheduled to discuss the consequences of Terra’s 40 billion crash.
According to the report, the exchanges involved will be held responsible for failing to implement necessary investor protections and wave damages that their clients might have suffered during the Terra collapse.
“We will check [the exchanges’] investor protection measures,” said Yoon Chang-Hyeon, a member of South Korea’s ruling party and chairman of the parliament’s special virtual assets committee.
Chang-Hyeon, who pushed for an emergency National Assembly hearing on Terra last week, suggested questions regarding the local exchanges’ reaction to Terra’s crash, implying that high trading volumes and transaction fees may have incentivized the exchanges to keep LUNA and UST trading open despite the apparent risks for their users.
Furthermore, South Korea’s financial regulators are also on their toes into the probation of all 34 crypto-related businesses (including 26 crypto exchanges and eight crypto wallet and security management companies) in the country; regulators are currently assessing whether the exchange companies have implemented needed anti-money laundering and investor protection mechanisms.
Do Kwon, the CEO of Terraform labs, who is currently being investigated by the Seoul Southern District Prosecutors Office on suspicions of engaging in a Ponzi scheme by promoting UST deposits through anchor protocol, is also invited to the emergency hearing.
The investigation of Do Kwon begins following the South Korean investors disclosed their intention to sue Do Kwon and his co-founder for fraud and other financial crimes over the Terra crash.
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