To prevent a similar catastrophic fall like LUNA, South Korea’s financial authorities are taking tighter measures. The measures to introduce legal safeguards amidst LUNA’s downfall were published by the Korea Times news publication.
The news report states that the financial authorities of the government are planning to bring more legal safeguards to the crypto industry. The measures will strengthen the supervision around exchanges to prevent a similar incident like the collapse of the Terra ecosystem that includes UST and LUNA.
Luna’s fall was a wake-up call
“We need to make exchanges play their proper role, and toward that end, it is crucial for watchdogs to supervise them thoroughly.” “When exchanges violate rules, they should be held legally responsible to ensure that the market functions well without any troubles.”
Rep. Sung Il-jong of the ruling People Power Party said during a National Assembly emergency seminar, Tuesday
The two-day meeting, which concluded on Tuesday, was intended to examine remedies to the current financial meltdown involving the two cryptocurrencies. The precipitous drop of the once-promising coins is thought to have affected over 280,000 Korean investors.
Since the crypto industry is not regulated and not controlled by any watchdog, the necessity for an urgent framework and regulation is the need of the hour.
During its heyday, last month, Luna’s market capitalization topped 50 trillion won, but it plummeted to almost nothing in just a week after Terra failed to maintain its intended $1 peg.
The conference was also attended by leaders of the country’s five main exchanges, as well as government officials, including Financial Services Commission Vice Chairman Kim So-young.
The fall of the Terra ecosystem urged the authorities to investigate deeper into Terraform Labs and Do Kwon. The Korean police had also requested crypto exchanges to freeze Luna Foundation Guard’s assets as the police received clues linking the foundation with possible embezzlement of funds.