South Korea to Establish Guidelines for Crypto Exchanges as Watchdogs Probe Terra Collapse

TerraUSD and its sister token LUNA Classic’s (LUNA) dramatic collapse have pushed the South Korean policymakers to call for swift crypto regulations.

Call for Draft Regulation

According to a new report, top officials have now asked cryptocurrency exchanges to devise guidelines with respect to the listing and delisting of digital tokens to safeguard the investors from yet another debacle.

Yun Chang-Hyun, a lawmaker who heads the ruling People Power Party’s virtual assets committee, has called for a second meeting with domestic cryptocurrency exchanges Upbit, Bithumb, Coinone, Korbit, and Gopax next week.

The politician revealed in an interview that the main objective of the meeting is to agree on a draft of the non-binding guidelines. South Korean policymakers are looking to implement a self-regulatory system similar to Japan.

The official also said the cryptocurrency industry was “neglected for too long without order and discipline” while highlighting the “shortcomings” when compared to traditional finance.

Further details of the draft guidelines have not been divulged, but much of the efforts are likely to be centered around employing stricter reporting requirements to ramp up transparency instead of tightening trading procedures, according to Bloomberg’s sources familiar with the matter.

Out of the five South Korean cryptocurrency exchanges, the representatives of the four have so far confirmed the second meeting but said that they are not aware of its agenda. The FSC, too, has not been able to comment on the plan of the meeting but asserted that the crypto platforms would release official announcements if any guidelines were set up.

Digital Assets Committee

Shortly after the high-profile implosion of the Terra ecosystem tokens, Chang-Hyun called for a parliamentary hearing held on May 24. He also asked the five crypto exchanges to account for their behavior during the crash. As per data revealed by the Financial Services Commission, the country’s financial regulator,  approximately 280,000 South Koreans had invested in Luna.

With Terraform Labs’ staff under probe by the authorities of the country, the ruling party is looking to launch a new digital assets committee to serve as the “control tower” for the sector so that stablecoin investors are better protected. The committee is slated to launch in the last week of June after the inauguration of the new finance chairman.