Major exchanges in Korea have agreed to create a new emergency system that will kick in within 24 hours in the event of another Terra crash..
With the new system, exchanges will come together to respond to sudden adverse market effectsas happened with Terra in May.
The deal came after Five of the country’s largest cryptocurrency exchanges, Upbit, Bithumb, Coinone, Korbit, and Gopax, will attend a session in the National Assembly, South Korea’s legislative body, on Monday to address market fairness.according to a report by local outlet Daily Sports.
Exchange leaders, members of the National Assembly, and Financial Supervisory Services (FSS) Chairman Lee Bok-hyeon discussed aspects of a new code of conduct that exchanges will voluntarily adhere to. to protect investors.
The new code will also include the deployment of an alert system in September to alert investors to high-risk virtual assets due to abnormal price changes or other unusual activities..
In October, the listing guidelines will be reviewed and a periodic evaluation system for all listed tokens will be launched.
In May, the collapse of the Terra ecosystem caused tens of billions of dollars in losses and a series of legal problems for its founder, Do Kwon.who was confirmed to have evaded some $40 million in taxes through Terraform Labs.
The code aims to systematize token listings and withdrawals to maximize regulatory compliance and eliminate differences in listing guidelines between each exchange..
Korean Ledger Market Leader Jun Hyuk Ahn told Cointelegraph on Thursday that this new address would bolster investor confidence in crypto exchanges that have been on shaky ground for years. He said that “it is too early to predict exactly what will happen, but it should bring more harmony to the market”:
“Greater transparency in the listing and delisting processes will help restore the trust of crypto traders that was lost with the Luna incident.”
National exchanges have taken the brunt of letting investors trade Terra (LUNA) as it crashed. The number of Korean LUNA holders grew by 180% between May 6 and May 18, from 100,000 to around 280,000. In that time, the stablecoin Terra USD (UST) had broken off and LUNA fell from over $60 to under $0.01. The new guidelines aim to prevent exchanges from allowing investors to trade such volatile tokens, closing trading within 24 hours or delisting them altogether..
LUNA holders in Korea
Before the crash: 100k
After the crash: 280kKoreans are just made different. pic.twitter.com/WltM1RTcny
— Jaemin Park (@jaemin_eth) May 24, 2022
LUNA holders in Korea
Before the fall: 100,000
After the fall: 280,000Koreans make themselves different. pic.twitter.com/WltM1RTcny
Secondly, a local News1 report claimed on Wednesday that exchanges could be losers in the long run if the guidelines are put in place. The report was of the opinion that strict new listing guidelines would hamper exchanges’ ability to generate revenue from altcoin listings:
“National exchanges often make a profit listing altcoins that are not listed by competitors because altcoin trading volumes are quite high.”
Korean exchanges have shared the spotlight with the South Korean founder and CEO of Terraform Labs, Do Kwon. Kwon has been investigated by the feared Securities and Financial Crimes Investigation Team, also known as the Fates of Yeoui-do, for alleged tax fraud and evasion..
On Wednesday, the Grim Reapers discovered documents from the Seoul tax office that claimed and confirmed that Kwon and Terraform Labs evaded some $40 million in corporate and income taxes in 2021according to The JoongAng media outlet.
Kwon has denied allegations of money laundering and tax evasion, including one that claims he has cashed in more than $2.7 billion in the last three years from the Terra ecosystem.. However, the US Securities and Exchange Commission still wants to see Kwon in the US Court of Appeals on charges of selling unregistered securities through the Mirror Protocol.
Clarification: The information and/or opinions expressed in this article do not necessarily represent the views or editorial line of Cointelegraph. The information set forth herein should not be taken as financial advice or investment recommendation. All investment and commercial movement involve risks and it is the responsibility of each person to do their due research before making an investment decision.
Keep reading:
Investments in crypto assets are not regulated. They may not be suitable for retail investors and the full amount invested may be lost. The services or products offered are not aimed at or accessible to investors in Spain.