South Korean financial authorities have carefully monitored the turmoil of South Korean investors, estimated at least 200,000 since the collapse of Stablecoin Terra, but have no authority to investigate or supervise offshore assets.
According to sources, South Korea’s Financial Services Commission and the Financial Supervisory Service have embarked on an emergency inspection of the crypto market as Luna plunged 99.999921% in just one week towards delisting. Luna’s crash sent a shock wave to the entire crypto market around the world, with liquid cryptos like Bitcoin crashing and causing huge losses to crypto investors.
Luna was invented by the Korean people and is designed to be associated with TerraUSD (UST), a stablecoin fixed one-to-one with the US dollar.
Luna temporarily rebounded 400% after Binance, the world’s largest cryptocurrency exchange, relisted the coin the day after its removal. However, experts believe it’s only a matter of time before Luna is kicked out of the market, as coin creator Do Kwon, CEO of Terraform Labs, has already admitted that Luna and TerraUSD have failed on Friday. I am.
The collapse of Stablecoin began on May 7, when Terraform Labs, the company behind Luna and TerraUSD, temporarily reduced the liquidity of TerraUSD and set up a new service. During the period, someone offloaded TerraUSD in bulk, causing a stablecoin crash. Liquidity remained low, so prices fluctuated significantly, even with temporary sellouts, and investors became concerned about price volatility and began to skyrocket.
In South Korea, it is estimated that at least 200,000 investors have deposited funds in Luna and Terra USD.
South Korean financial authorities cannot take direct action because there is no legal basis to regulate cryptocurrency companies, except to prevent money laundering activities. Terraform Labs is headquartered in Singapore.
Meanwhile, with the collapse of Luna, investors are heading towards other stable coins, especially the USDC, which is considered to be more stable.
Backed by the US dollar and short-term government bonds, the market capitalization of USDC rose 5.4% from $ 48 billion on May 6, before the TerraUSD crash, to a record $ 51 billion on Sunday. The market capitalization of TerraUSD plummeted 98% from 23.7 trillion won ($ 18.5 billion) to 520 billion won during the same period.
Choi Kund and Cho Jae Hyun
[ⓒ Pulse by Maeil Business News Korea & mk.co.kr, All rights reserved]
