According to a report in the Korea Times, South Korean financial authorities are looking to introduce measures to tighten controls on crypto exchanges following the collapse of Terra.
Cryptocurrencies were on the agenda of an emergency meeting of the National Assembly this week. The two-day meeting was to discuss the disaster surrounding the Terra stablecoin UST and its sister token Luna, both of which collapsed to near zero earlier this month.
"We need to ensure that exchanges play their role properly, and to that end, it is important for regulators to monitor them thoroughly," said Rep. Sung Il-jong of the ruling People Power Party. "If the exchanges violate the rules, they should be held legally accountable to ensure that the market operates without problems.
According to the Korea Times, some 280,000 South Koreans are believed to have been victims of the abrupt drop in UST and Luna stock prices.
The country's Financial Services Commission plans to work closely with law enforcement "to monitor illegal acts in the industry and protect investors' rights," said Vice Chairman Kim So-young.
Authorities are also investigating whether Do Kwon, the CEO of Terra creator Terraform Labs and a South Korean national, committed fraud against investors with his crypto project.
Cryptocurrencies have been a major topic of political discussion in South Korea in recent months, with both candidates in the March presidential election taking a crypto-friendly stance to appeal to younger voters.
The winning candidate, Yoon Suk-Yeol, promised to deregulate the industry to "harness the unlimited potential of the virtual asset market."