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DeFi and Credit Risk

A Meeting Between the Korean Government and Cryptocurrency Exchanges

According to the Korea Times, the South Korean government is transferring blame for the cryptocurrency terra (LUNA) and algorithmic stablecoin terrausd (UST) crashes onto crypto exchanges.

The Korean National Assembly and administration conducted an emergency meeting Tuesday with the CEOs of the country's largest crypto exchanges to explore steps to prevent a repeat of the LUNA and UST collapses. The magazine stated that politicians and banking officials appeared to favour the adoption of stricter rules on crypto exchanges.

The Korean government has chastised cryptocurrency exchanges for their slow response to the two coins' fall. LUNA was not delisted from several big Korean crypto exchanges until two weeks later. Some opponents claim they purposefully delayed delisting in order to profit from the situation.

Rep. Yoon Chang-hyun of the ruling People Power Party expressed worry about the confusing listing and delisting rules used by cryptocurrency exchanges. He emphasized:

"The exchanges don't have a consistent listing standard, and they don't have any discussions about it."

Lee Sirgoo, the CEO of Dunamu, which owns Upbit, the country's leading cryptocurrency exchange, indicated that adopting a single listing criteria across local cryptocurrency exchanges will not fix the problem. "Crypto assets may be transmitted to non-Korean based exchanges, and many crypto investors are already doing so," he stated.

"We need to make exchanges fulfill their rightful function," People Power Party Rep. Sung Il-jong allegedly remarked during the meeting. "To that end, it is necessary for watchdogs to carefully oversee them." He continued, "

"When exchanges break the rules, they should be held legally accountable to guarantee that the market runs smoothly."

"We are going to create tight relations with the Ministry of Justice, the prosecution, and the police, in order to monitor any illegal conduct in the business and defend investors' rights," said Vice-Chairman Kim So-young of the Financial Services Commission (FSC), the country's main financial regulator.

"Exchanges may easily become a target of criticism at this moment when no precise regulatory regulation has been published," a representative from one of the local bitcoin exchanges said. He continued, "

"We understand the meeting's objective, but the most important step is for authorities to summon Do Kwon, the company's co-founder, as soon as possible."

In the near future, the National Assembly wants to convene a hearing on the LUNA tragedy. Do Kwon, on the other hand, is unlikely to attend because his whereabouts remain unknown, according to the magazine.

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