The ruling party officials are likely to hold the exchanges responsible for the crash of the Terra network. They will also blame them for the loss of investor funds. The local media outlet, Newspim, reports that the party has fixed May 24, 2022 as the meeting date.
The party invited the CEOs of Coinone, Korbit, Gopax, and Bithumb crypto exchanges to the meeting. The discussion will center around the cause of the $40B loss in investor funds in the crash.
Authorities Probe Terra Network Collapse
According to Newspim, the authorities will hold the exchanges accountable for investors’ losses following the network crash. The authorities allege that the exchanges should have implemented greater trader protection. Thus, investors won’t have incurred such huge losses following the crash.
A top party member, Yoon Chang-Hyeon’s post on Facebook, reads, “we will investigate investor protection these exchanges put in place.” Chang-Hyeon also heads the parliament’s committee on special virtual assets.
Chang-Hyeon was one of the legislators who urged the National Assembly to launch a detailed probe into the incident. The top party member alleged that local crypto exchanges were more concerned about their profits than investors’ funds.
He further said, “why didn’t exchanges suspend trading on UST and LUNA tokens? They enjoyed the huge transaction fees and trading volumes occurring on these tokens’ trade.”
Once this Terra crash probe is completed, South Korea’s financial regulators also plan to probe the operations of all local VASPs. There are 34 VASPs in South Korea. Eight are crypto wallets, while the remaining are crypto exchanges and crypto security firms.
Participants At The Meeting
Per Newspim, the objective of the probe is to ensure that all these VASPs have been applying the appropriate investor protection tools. Also, it wants to be sure that they have been complying with the anti-money laundering policy. Heads of South Korea’s policy committee, political affairs committee and virtual asset committee are among those who will attend this crucial meeting.
Other attendees likely to attend the meeting include Kim Hee-Gon (political affairs committee secretary), and Kim Jeong-Gak (FASC deputy chairman and FIU president).
Executives from other relevant agencies will also attend the meeting. These agencies include the National Police, The Financial Supervisory Service, and the Fair-Trade Commission. Multiple local news outlets report that the ruling party will also be meeting with Terraform Labs CEO, Do Kwon, in a separate meeting.
Kwon Is Facing Several Issues Following The Crash Of The Terra Network
Kwon is also facing legal action from Seoul’s South district prosecutors. They allege that the Terra-linked Anchor Protocol promoted unrealistic yields for UST deposits.
Before the probe by Seoul’s South district prosecutors, prominent South Korean investors have planned to take Kwon and his Terra co-founder to court. They allege that the two should be held responsible for their roles in the Terra network crash.
Recently, a BBC report stated that police arrested an influencer who attempted to wound Kwon in his home. The investor claims to have lost over $2.4M to the Terra network crash.
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