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Korean exchanges agree on emergency system in case of Terra-style collapse

ByCrypto Host News

Jun 16, 2022


Korea’s leading exchanges have agreed to form a new emergency system that will take effect within 24 hours if another Terra – style collapse threatens to happen.

Under the new system, exchanges will agree to respond to sudden adverse market effects, as happened to Terra in May.

The deal came after five of the country’s largest crypto exchanges, Upbit, Bithumb, Coinone, Korbit and Gopax, attended a session at the National Assembly, South Korea’s legislature to address market equity on June 13, according to ‘ a report from the local newspaper Daily Sports.

Bursary leaders, members of the National Assembly and chairman of Financial Supervision Services (FSS), Lee Bok-hyeon, discussed aspects of a new code of conduct that will voluntarily adhere to exchanges to protect investors.

The new code will also see the deployment of an alert system in September to alert investors to exceptionally high-risk virtual assets due to abnormal price changes or other unusual activity.

In October, listing guidelines will be reviewed and a regular evaluation system will be put in place for all listed tokens.

In May, the collapse of the Terra ecosystem led to tens of billions of dollars in losses and a series of legal problems for the founder, Do Kwon, who confirm about $ 40 million in tax evasion by Terraform Labs.

The code aims to systematize token listings and delistings to maximize regulatory compliance and eliminate differences in listing guidelines between each exchange.

Korean market leader Ledger Jun Hyuk Ahn told Cointelegraph on Thursday that this new direction will boost investor confidence in crypto exchanges that have been on shaky ground for years. He said “it is too early to predict exactly what will happen, but it should bring more harmony to the market.”

“More transparency about listing and delisting processes will help restore the confidence of crypto traders who were lost by the Luna incident.”

Domestic stock exchanges bore the biggest debt that made their investors trade LUNA when it crashed. The number of Korean LUNA holders grew 180% between May 6 and May 18 from 100,000 to about 280,000. During that time, the Terra USD decoupled stablecoin and LUNA fell from more than $ 60 to below $ 0.01. The new guidelines will be aimed at preventing stock exchanges from allowing investors to trade such highly volatile tokens by closing trades within 24 hours or delisting them altogether.

On the other hand, at local report of News1 said on Wednesday that exchanges could be long-term losers if the guidelines are established. The report felt that the strict new listing guidelines would hamper the exchanges’ ability to generate income from altcoin listings.

“Domestic exchanges often ensure profits by listing altcoins that are not listed by competitors because altcoin trading volumes are quite high.”

Korea’s exchanges shared the spotlight with South Korean founder and CEO of Terraform Labs, Do Kwon. kwon was investigated by the dreaded Financial and Securities Crime Investigation Team, also known as the Grim Reapers of Yeoui-do, for alleged misconduct and tax evasion.

Related: Court of Appeal rules Do Kwon, Terraform Labs must heed SEC summons served in September

On June 15, the Grim Reapers unveiled documents from the Seoul Tax Office confirming that Kwon and Terralabs evaded about $ 40 million in corporate and income taxes in 2021. accordingly to The JoongAng news outlet.

kwon het denied the allegations of money laundering and tax evasion, including one that claims to have paid out more than $ 2.7 billion over the past three years from the Terra ecosystem. However, the SEC still wants to see Kwon at the American Court of Appeal on a charge of sale of unregistered securities by the Mirror Protocol.