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Luna News Roundup: Terra Founders Under Threat

 


The cryptocurrency LUNA lost more than 99% of its value in a short period of time, while Terra still could not restore the US dollar peg to the stablecoin UST.


After the cryptocurrency LUNA and the stablecoin Terra crashed last week, calls for comprehensive crypto regulation by the ECB and members of the EU Commission are getting louder. Terra founder Do Kwon was threatened and South Korea launched an investigation into what happened.


Officials are calling for stronger crypto regulation

Italian economist Fabio Panetta is a member of the Executive Board of the European Central Bank. In a keynote speech on May 16, 2022 about the digital euro, he criticized the current crypto regulation.


“Recent developments in the crypto-asset market show that it is an illusion to believe that private instruments can act as money when they cannot be converted into public money at par at any time.”


Panetta also sees great dangers in stablecoins. He cited the recent Terra crash as an example of this: “There is no guarantee that they (stablecoins) can be redeemed at face value at any time – just last week the world’s largest stablecoin temporarily lost its peg to the US dollar. Also, stablecoins are not covered by any deposit insurance, nor do they have access to standing facilities from central banks. They are therefore vulnerable to runs, as demonstrated by the collapse of another stablecoin – TerraUSD.”


Officials in the UK also intend to push the regulation of stablecoins. However, algorithmic stablecoins like Terra are exempt from this. Also, US Treasury Secretary Janet Yellen wants to pass a bill regulating stablecoins by the end of 2022.

The South Korean Financial Services Commission (FSC) and Financial Supervision Service (FSS) have requested information from local cryptocurrency exchange operators about transactions related to TerraUSD and Luna . This includes data on trading volume, closing prices and the number of affected investors. The country's financial regulators also demanded the stock exchanges' countermeasures against the market collapse and analysis of the causes of the collapse:


"Last week, financial authorities requested data on the number of transactions and investors, and assessed the relevant actions of the exchanges," a local exchange representative said. "I think they did this to devise measures that would minimize the damage to investors going forward."


Terra Founder threatened

Do Kwon, the founder of Terra, has been threatened several times. Recently , a LUNA investor even broke into Kwon's home in east Seoul. He then rang Known's doorbell while his wife was in the apartment.


"I lost about 2 to 3 billion won ($2.3 million)," the suspect told reporters after undergoing an investigation at Seongdong Police Station. According to authorities, after Kwon's visit, his wife asked the police to protect them both from further harm.


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All information contained on our website has been researched to the best of our knowledge and belief. The journalistic contributions are for general information purposes only. Any action taken by the reader based on the information found on our website is entirely at their own risk.

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