Jeong Eun-bo, Financial Supervisory Service Chief, "Concerns Over Potential Harm to Cryptocurrency Users"
[Asia Economy Reporter Lee Jung-yoon] Ko Seung-beom, Chairman of the Financial Services Commission, stated that he is closely monitoring the price and trading trends related to the collapse of the cryptocurrency Luna and TerraUSD (UST) and is making efforts to protect investors.
On the 17th, attending the full meeting of the National Assembly's Political Affairs Committee, Chairman Ko said, "Since it is not legally institutionalized, there are limitations in grasping the specifics, but we are closely watching the price, trading trends, and numerical status," adding, "We intend to implement measures to ensure investor protection for virtual asset traders and others."
Regarding the point that 514 cryptocurrencies listed on exchanges since 2017 have been delisted, Chairman Ko said, "Because discussions on the Virtual Asset Business Act related to investor protection have not been conducted, there is no legal basis, making separate measures difficult," and added, "Although investment is a matter of personal responsibility, we will consider guiding investors to be especially cautious."
When asked about the scale of losses from the Luna incident, he explained that as of recently, there are approximately 280,000 Luna users holding about 70 billion coins, and said, "We plan to discuss with domestic virtual asset operators to ensure proper warnings and precautions for investors."
Regarding the enactment of the Digital Asset Basic Act, he added, "Even if the law is enacted, it will be difficult to solve everything perfectly, but since discussions on the Virtual Asset Business Act will proceed, it would be desirable to also discuss the regulatory framework and direction for stablecoins."
Jung Eun-bo, Governor of the Financial Supervisory Service, stated at the executive meeting held that day, "There is concern about the reliability of the cryptocurrency market and the occurrence of user damages."
He continued, "Currently, due to the absence of related laws, the supervisory authorities' role is limited," emphasizing, "We must identify the damage situation and causes, and ensure that the upcoming Digital Asset Basic Act fully reflects measures to prevent unfair trading, consumer damage, and requirements for qualified Initial Coin Offerings (ICOs) to prevent recurrence."
Governor Jung also added, "Given the offshore transaction-centered nature of the cryptocurrency market, I urge in-depth discussions with major overseas supervisory authorities regarding the cryptocurrency regulatory framework going forward."
Earlier, as the value of UST, classified as a domestic cryptocurrency, declined, the price of its sister coin Luna began to plummet. The collapse of Luna's price led to declines in other cryptocurrencies such as Bitcoin. UST is a stablecoin designed to peg its value at 1 dollar per coin. Most of the assets backing UST's value are Luna, but as UST's price fell below 1 dollar, Luna's price also plunged, creating a vicious cycle of declines in both UST and Luna.
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