South Korean authorities cite LUNA debacle to call for speedier crypto oversight

South Korean financial regulators have reportedly begun an emergency assessment of digital assets, geared toward accelerating the establishment of the “Digital Asset Basic Act” — the country’s upcoming regulation on cryptocurrencies.

See related article: LUNA pumps and dumps repeatedly in weekend’s roller coaster run

Fast facts

  • The LUNA debacle will likely speed up the enactment of virtual currency regulations in South Korea, officials tell local media
  • South Korea’s upcoming “Digital Asset Basic Act” is slated to be legislated in 2023, and to go into effect by 2024. 
  • While details of the legislation have not yet been officially revealed, it likely will be geared toward protecting investors, local media reported, citing officials.
  • The Financial Services Commission (FSC) and Financial Supervisory Service (FSS), the two regulatory bodies in charge of digital assets, will likely raise awareness among digital asset investors following the LUNA meltdown, officials said.
  • Currently, the South Korean government has no legal basis to take direct measures to examine or supervise the Terra platform, as existing laws are only geared towards anti-money laundering issues.
  • On Monday, South Korea’s National Police Agency revealed it is closely monitoring the LUNA situation, but currently has no plan to investigate Terraform Labs. Police representatives added that no civil complaints have been filed against Do Kwon when asked about news of the CEO being sued overseas.

See related article: South Korea hopes to institutionalize crypto by 2024