Terra Founder Do Kwon To Be Summoned By The South Korean Government

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The South Korean Government planning to summon Terra founder Do Kwon for a parliamentary hearing over the Terra crash.

A representative of South Korea’s ruling People Power Party, Yoon Chang-Hyeon, has planned a parliamentary hearing on the stablecoin’s sudden collapse of TerraUSD (UST) last week, reported by the local news Newspim. 

Chang-Hyun at a plenary meeting of the National Assembly’s Political Affairs Committee said that: 

 “We should bring related exchange officials, including CEO Do Kwon of Terra, which has become a recent problem, to the national assembly to hold a hearing on the cause of the situation and measures to protect investors.” 

The crisis of stablecoin Terra began on May 7 when UST, the Terra Blockchain’s algorithmic stablecoin, started losing its peg with the U.S dollar. UST over these days has collapsed even below 10 cents and is still trading at that level. 

Chang – Hyun wants to account for crypto exchanges for their behavior during the crash, adding to this:

 “Coinone, Korbit and Gopax stopped on May 10, Bithumb on May11, but Upbit did not stop trading until May 13,” he said.”Upbit, which was the least to stop trading even after seeing the crash, is the No.1 company with an 80% share. In just those three days, it earned close to 10 billion won[$7.8 million] in commission income.”

Emergency Inspections

Yonhap News Agency, another major Korean outlet, reported that local financial regulators of Korea have launched ‘emergency inspections’ over local crypto exchanges to ensure their investment protections after experiencing the UST collapse. 

As a reaction to the collapse, Korea’s Financial Services Commission (FSC) and the Financial Supervisory Service (FSS) have reportedly asked crypto exchanges to provide information related to UST and Luna transactions. 

And also asked to include their trading volumes and the number of investors associated with them. Adding to this, the two regulatory agencies have also asked to submit a report on their countermeasures to the UST crash, as well as their analysis of the cause of the collapse. 

An official of a local crypto exchange told Yonhap, that : 

“Last week, financial authorities collected data on the amount of transactions and investors, and sized up the exchanges’ relevant measures. I think they did it to draw up measures to minimize the damage to investors in the future.”