Upbit and 13 Others Including Stablecoins Warned for Investment Caution: "Possibility of Rapid Price Fluctuations"

[Asia Economy Reporter Lee Jung-yoon] Domestic cryptocurrency exchange Upbit has warned of investment risks related to stablecoins and cryptocurrencies linked to them.

On the 19th, according to the cryptocurrency industry, Upbit announced a 'Notice on Investment Caution for Stablecoins and Related Digital Assets' the day before.

Upbit stated, "As revealed by the recent sharp price fluctuations of Luna, if there are sudden changes in the collateral value of stablecoins and digital assets with functions linked to stablecoins, or if the algorithm does not operate properly, rapid price fluctuations may occur," adding, "Please exercise caution when investing in related digital assets."

It continued, "If a significant defect occurs in the function of the digital asset and it is judged that measures to protect investors are necessary, actions such as deposit and withdrawal restrictions or termination of trading support may be taken."

The cryptocurrencies listed in the notice are a total of 13, including ▲Near Protocol (NEAR) ▲Dai (DAI) ▲Reserve Rights (RSR) ▲Maker (MKR) ▲Steem (STEEM) ▲Steem Dollars (SBD) ▲Waves (WAVES) ▲Tether (USDT) ▲Tron (TRX) ▲TrueUSD (TUSD) ▲Pax Dollar (USDP) ▲Hive (HIVE) ▲Hive Dollars (HBD).

Previously, when the price of TerraUSD (UST), a stablecoin designed to be pegged to 1 dollar, plummeted, the price of its sister coin Luna also dropped, causing a major crash. Unlike other stablecoins backed by safe assets such as cash or government bonds, UST maintained its value through an algorithm using Luna. However, due to concerns about an economic recession, the prices of UST and Luna fell, eventually leading to a major crash.