Tuesday, November 29, 2022

Terra’s Collapse Could Prompt A Wave Of International Regulations

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Terra’s collapse could prompt a wave of international regulations since short-term crackdowns could have long-term effects if more governments are going to become less crypto-friendly so let’s read more today in our latest cryptocurrency news.

Terra and UST dropped to zero in an instant and wiped out tens of billions of dollars in market cap with a larger number of investors that suffered losses already launching lawsuits. Most key industry players warned that regulatory pressure on crypto can enhance now since Terra’s collapse could prompt it. For example, we can see that South Korea will be the first country to intensify the pressure because it is possibly the most fanatical country in the world when it comes to crypto.

The data shows that more than a third of the country’s citizens are getting invested in crypto and South Korea is the top source of customers for exchanges with derivatives trading like BitGet and ByBit. The new president is expected to ease some restrictions and appeal to younger voters but there is some strong opposition. Terra is known to be a project created by the South Koreans.

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Do Kwon

The Korean community lost a lot of money after the Terra collapse and the top venture fund Hashed even lost $3.5 billion. The government set up a financial regulatory panel dubbed “Death” and the IRS started investigating taxes, requesting that Terra CEO Do Kwon should appear at hearings and expect possible lawsuits.

The Terra Foundation relocated from South Korea to Singapore which can generate a lot of litigation. Singapore has also been crypto-friendly in the past and attracted crypto institutions from all across the world. However, in the past few years, it faced pressure from other countries which led to targeted crackdowns and many major exchanges moved to Dubai. In the wake of the Terra Crash, Singapore’s regulatory policies could tighten and more than 1000 local Singaporean investors reproted to police that they lost all money on the project.

The DEFI, NFT, and cryptocurrencies brought together the most capital from large companies but there were traditional central bankers and veteran investors in the US that opposed cryptocurrencies. After the Terra collapse, the Treasury Department and the SEC announced they are trying to tighten regulations while in China regulators kept a close eye on the USDT-led stablecoin so the UST crash could be an excuse for the Chinese regulators to make another crackdown on stablecoins.

 

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