Terra·Luna Incident... US Financial Authorities Likely to Intensify Cryptocurrency Regulations

[Asia Economy New York=Special Correspondent Joselgina] Following the collapse of the Korean virtual currencies Luna and TerraUSD (UST), calls for cryptocurrency regulation are growing in the United States.

On the 16th (local time), according to major foreign media including The Washington Post (WP), U.S. financial authorities such as the Securities and Exchange Commission (SEC) and the Treasury Department are focusing on stablecoins, a type of cryptocurrency, and related regulatory discussions are ongoing.

Gary Gensler, SEC Chairman, attended the Financial Industry Regulatory Authority (FINRA) annual meeting on the same day and stated that cryptocurrencies are highly speculative and investors need more protection. He emphasized that otherwise, the market will lose trust.

He also pointed out that unlike other asset investors, cryptocurrency investors are not provided with sufficient disclosures. Chairman Gensler said, "There is a lot to be done here (in cryptocurrency). General investors have not been well protected so far," adding, "We will continue to act as the police." This signals that regulatory actions by authorities will intensify in the future.

A senior Treasury Department official also hinted to WP that the department might independently pursue regulation separate from Congress. Earlier, Treasury Secretary Janet Yellen urged Congress to legislate so that stablecoin issuers are regulated like banks. Currently, stablecoin regulatory bills are circulating in the U.S. Congress.

The cryptocurrency industry argues that stablecoins backed by the dollar or other assets are safe, unlike algorithm-based stablecoins such as UST. However, WP reported that authorities are currently not making such distinctions.

Rohit Chopra, Director of the Consumer Financial Protection Bureau (CFPB), also forecasted regulatory moves on cryptocurrencies within this year in an interview with Bloomberg TV. He said, "Many thought stablecoins would be as good as the U.S. dollar, but they have realized that is not the case," evaluating that stablecoins are not ready to be used as a means of payment.