With a sharp fall in the values of cryptocurrencies such as Terra (USDT) and Luna, the crypto industry has been shook to the core. As a result, the financial authorities in South Korea launched an emergency check on trends and are reviewing cryptocurrencies. Further, the region is planning to impose certain acts for protecting the citizen’s funds in such situations.
As reported by South Korean publication Yonhap News, the financial authorities plan to enact the Basic Act on Digital Assets which includes consumer protection, next year and then implement it in 2024.
According to the virtual currency industry and related ministries, the Financial Services Commission and the Financial Supervisory Service, which are the departments in charge of virtual assets including cryptocurrencies in South Korea, started to check the emergency trend following the Luna incident. Further, they are speeding up the enactment of related laws while observing the enactment of virtual currency regulation laws in other major countries.
The publication states that Financial authorities do not have the authority to request data from the Terra platform or to inspect and supervise it, and as a result, they cannot take direct action. However, it plans to try to make it an opportunity for financial consumers to become aware of the risks of investing in virtual assets.
An official from the financial authorities said, “We are monitoring the overall situation and checking trends in relation to the Luna incident, but there is no means for the government to respond immediately”. “I have the authority to supervise the anti-money laundering of coin transactions, but there is no basis for intervention in this price crash”, said the official.
For those unaware, the Terra platform behind the Luna cryptocurrency recently had to temporarily shut down its blockchain to stop transactions after the token’s price crashed nearly 100% overnight, making the network prone to a possible attack.