Terra along with its stablecoin UST destabilized the entire crypto market. The de-pegging of UST caused an immense loss. Several individuals across the globe claimed to have lost their life savings. The promising project has now driven several into homelessness and poverty. Alarmed by this, regulators from different governments came forward and decided to take a closer look into the crypto-verse. South Korea has been making headlines over the same.
Just yesterday, a member of the ruling party urged South Korea’s government to summon Do Kwon the founder of Terra for a hearing. Following this news, the country’s Financial Services Commission [FSC] wanted to further impose a more stringent set of rules on the crypto-verse.
A report titled “The Comparative Analysis of the Virtual Property Industry Act” reportedly shed light on including penalties for not abiding by the laws put forth by South Korea. The potential regulations are expected to minimize and negate pump and dump assets, along with insider and wash trading.
In addition to this, the licensing process in South Korea would also be switched up. Acquiring a license for crypto platforms could be harder in the future. A wide range of licenses is likely to be issued varying based on the risk further involved in the project.
Recently, the government wanted its financial regulators to examine the crypto-verse and expedite the implementation of the “Digital Asset Basic Act.” FSC’s latest report could be linked to this review.
Has Terra caused uncertainty in the crypto market?
Contradicting its function as a stablecoin, UST disrupted the entire market. Just when regulators started warming up to the crypto market, Terra’s downfall nudged regulators to look at the perils of the market. South Korea wasn’t the only country probing the crypto market.
The head of the French central bank, Francois Villeroy de Galhau disclosed that the next G7 meeting would extensively focus on cryptocurrency regulations. The meeting is expected to take place this week in Germany.
Furthermore, speaking about the sudden inclination towards regulating the crypto industry, Villeroy said,
“What happened in the recent past is a wake-up call for the urgent need for global regulation.”
While Terra is already drowning in criticism, the potential rollout of stringent crypto laws could hinder the market’s growth.