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A South Korean lawmaker is calling on the country’s National Assembly to hold a hearing with Terraform Labs CEO Do Kwon and representatives of major domestic crypto exchanges following the recent collapse of the stablecoin UST.
According to local sources, MP Yun Chang-Hyun of the ruling National Power Party is asking Terraform Labs CEO Do Kwon and many directors of major cryptocurrency exchanges in South Korea to answer first. Congress on the case related to the LUNA-UST model.
Mr. Do Kwon is a Korean citizen and Terraform Labs was initially registered in the country of kimchi, but recently moved to Singapore.
Mr. Yun Chang-Hyun spoke before the Internal Affairs Committee of the National Assembly of Korea:
“We need to bring exchange officials, including CEO Do Kwon of Terra, the project that has recently encountered problems, before Congress to be questioned about the reasons and ways to protect investors.”
As reported by CHK, the LUNA-UST model began to show signs of collapse on May 8, causing the price of LUNA to drop millions of times, while the stablecoin UST also sometimes lost more than 96%. value. In the process of going down, many investors both in Korea and internationally took advantage of “bottom-fishing” LUNA, but unexpectedly, this currency plummeted without stopping, leading to heavy losses.
Not stopping there, Mr. Yun Chang-Hyun also wanted to question the major crypto exchanges about how they work during the volatile market. The MP added:
“Coinone, Korbit and Gopax stopped trading on May 10, Bithumb on May 11, but Upbit didn’t do this until May 13. Upbit is the last exchange to stop trading even after seeing the crash and is the largest exchange with 80% market share. In just 3 days, this exchange has collected more than 10 billion won [hơn 7,8 triệu USD] transaction fees.”
Meanwhile, South Korean financial regulators have “unexpectedly inspected” exchanges, asking for information on trading activities related to LUNA and UST. The Korean Financial Services Commission (FSC) also asked the exchanges if they had any precautions to prevent the price of UST from “free falling” and provided the reason behind the incident.
South Korea is one of the most proactive countries to regulate cryptocurrency, requiring exchanges to register to operate and intends to tax crypto investments up to 20%. New South Korean President Yoon Suk-yeol has pledged to impose more protections for crypto investors before the implementation of the new tax law in 2023.
The collapse of LUNA-UST has attracted the attention of many other senior financial officials around the world, including US Treasury Secretary Janet Yellen.
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