The South Korean government is shifting responsibility for the crash of cryptocurrency terra (LUNA) and algorithmic stablecoin terrausd (UST) onto crypto exchanges, the Korea Times reported Thursday.
The Korean National Assembly and the government held an emergency meeting with the heads of major crypto exchanges in the country Tuesday to discuss measures to prevent the recurrence of the LUNA and UST implosion. However, the lawmakers and financial authorities appeared to support the imposition of tougher regulations on crypto exchanges, the publication conveyed.
The Korean government has criticized crypto exchanges for their delayed response to the collapse of the two cryptocurrencies. Several top Korean crypto exchanges did not delist LUNA until two weeks later. Some critics said they intentionally delayed delisting to reap more commissions from the incident.
Rep. Yoon Chang-hyun of the ruling People Power Party raised concerns over crypto exchanges ambiguous listing and delisting standards. He stressed:
The exchanges do not have any unified listing standard, nor do they hold any negotiations over the issue.
Responding to the lawmakers‘ discussion about imposing a unified listing standard across domestic cryptocurrency exchanges, Lee Sirgoo, the CEO of Dunamu, which operates Upbit, the country’s top exchange, explained that it will not solve the problem. “Crypto assets can be sent to overseas exchanges, and many crypto investors are already using non-Korean headquartered exchanges,” he said.
Rep. Sung Il-jong of the People Power Party reportedly said during the meeting: “We need to make exchanges play their proper role, and toward that end, it is crucial for watchdogs to supervise them thoroughly.” He added:
When exchanges violate rules, they should be held legally responsible to ensure that the market functions well without any troubles.
Vice-Chairman Kim So-young of the Financial Services Commission (FSC), the country‘s top financial regulator, said: “We are going to build close ties with the Ministry of Justice, the prosecution and police, in a bid to monitor any illegal acts in the industry and protect investors’ rights.”
An official from one of the domestic cryptocurrency exchanges opined: “Exchanges can easily become a target of criticism at this period of time when no specific regulatory guideline has been introduced.” He added:
We understand the purpose of the meeting, but the most urgent step is to summon Do Kwon, co-founder of the company, as quickly as authorities can.
The National Assembly plans to hold a hearing session on the LUNA incident in the near future. However, the publication noted that Do Kwon is unlikely to attend since his whereabouts are unknown.