South Korea Toughens Up Security In Response To Terra’s Crash

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South Korea’s Central Bank Initiates Pilot Scheme For Trialing Digital Won
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According to Local media accounts, South Korea’s Financial Supervisory Service (FSS) has moved to standardize risk assessment for virtual assets, the FSS reported these details during the “Enactment of the Digital Asset Framework Act and Emergency Inspection of Coin Market Investor Protection Measures” conference.

Averting another Terra/Luna incident

The recent UST/LUNA collapse has given rise to several calls for government regulation in the Cryptocurrency space. South Korea’s financial authorities and the Financial Supervisory Service would be analyzing the risk characteristics of domestic virtual assets as a way to manage risks in the virtual asset market. 

In order to analyze the risk characteristics of domestic virtual assets, the FSS plans to entrust research services to institutions with public trust first. It is known that it is currently in the final stages of contracting a service contract with a research institute affiliated with a university.

First, the Financial Supervisory Service is planning to move away from the method currently evaluated by exchanges in different ways and unify them. The purpose is to ensure that investor protection is systematically possible only when coins are evaluated with the same model.

There is also an observation that the same method as the fund investment risk rating system can be applied in the financial investment industry. If the Framework Act on Digital Assets is enacted, it is expected that the introduction of the modeling can be ordered from the virtual asset exchange.

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Terra’s Do Kwon is in trouble with South Korea

Earlier this month, Do Kwon’s UST/LUNA’s crash wiped out billions of dollars from investors around the world, several findings later, including a tax evasion allegation, led to the legal prosecution of the creator of Terra.

The Seoul Southern District Prosecutors’ Office said on Friday that it has kicked off an investigation on Terraform Labs, the organization behind the stablecoin project Terra led by Do Kwon.

The case has been assigned to the Financial and Securities Crime Joint Investigation Team, a special financial crimes unit brought back recently by the newly appointed justice minister Dong-hoon Han, according to local media.