Key Takeaways:
- South Korea to implement the “Digital Asset Basic Act” in 2024 after the Luna fiasco.
- The country also has other plans to strengthen policies and adopt strategies to protect the crypto market there.
The whole crypto space is familiar with the Luna fiasco. Authorities are alarmed and are in talks to gain control over the unstable crypto-market to safeguard users from the volatility of digital assets.
Korea accepted cryptocurrencies in 2020 as the government wanted to tap into the booming market. However, the government is questioning the security of the users after the recent Luna incident. Therefore, the Korean authorities including the Financial Services Commission and the Financial Supervisory Service have started an emergency assessment of the crypto market.
An official stated, “We are monitoring the overall situation and checking trends in relation to the Luna incident, but there is no means for the government to respond immediately.” He further said that though he is in charge of the anti-money laundering of coin transactions, “there is no basis for intervention in this price cash.”
According to local reports, the financial regulators of South Korea have already started working on the Basics Act on Digital Assets. The bill is to be implemented in 2024 and will ensure customer protection.
The native cryptocurrency exchanges also got worried that consumers may think that all markets related to virtual assets failed as Luna plummeted. To avoid such misconceptions further, the industry has unanimously agreed to educate financial customers regarding the differences in virtual currency. It will be done through a strategic and continuous training course on digital currencies.
An official said, “The most worrying thing about this incident is that the failure of Terra coin can be seen as a failure of the entire cryptocurrency industry.”
The country will be encouraging the use of the ‘Digital Asset Basic Act’ to ensure that investors are protected from rug-pulls, scams, and hacks and will lay conditions for issuing the domestic coin (ICO). The authorities are also considering the establishment of a regulatory system by segregating digital currencies into securities and non-securities.
This initiative will allow the issuance of the ‘securities’ according to the Capital Market Act regulation system. A separate regulatory system is to be established for ‘non-securities’ for its issuance, listing, and unfair trade prevention.
The downfall of Luna has shaken the strong foundations of the market. South Korea is already gearing up to restore balance, and other countries are believed to follow.
