Korean regulators have requested data from crypto exchanges about the collapse of LUNA and UST

South Korean financial regulators have opened an urgent investigation into the activities of local cryptocurrency exchanges amid the collapse of the LUNA token and UST stablecoin, Yonhap news agency reports, citing sources.

According to them, the Financial Services Commission and the Financial Supervision Service requested information from the exchanges about LUNA and UST transactions, including trading volumes, prices and the number of investors. In addition, exchanges need to develop measures to prevent the recurrence of such a situation in the future. According to available data, about 200,000 South Koreans have invested in LUNA and UST.

At a meeting with senior officials, the head of the Financial Services Commission, Jong Un Bo, said that recent events could undermine confidence in the cryptocurrency market and cause losses for many investors. He also called for establishing the exact causes of the incident and possible consequences, despite the lack of appropriate regulation. This incident, according to him, should be a reason to cooperate with foreign authorities regarding the regulation of the cryptocurrency market, since most of the assets represented on it are traded in foreign jurisdictions.

The LUNA rate, meanwhile, jumped and went down again after Terraform Labs CEO Do Kwon presented another system recovery plan. He proposes to fork Terra – to create a new network without UST, which would be focused on the industry of decentralized finance. Tokens of the new network should be distributed among LUNA holders. According to Kwon, if the plan is approved by the majority of validators, the fork can be held as early as May 27.

The proposal caused a mixed reaction. Some considered it unfair to those who purchased LUNA for about $100 and now should be on an equal footing with investors who bought the token for a fraction of a cent. As a solution, Kwon suggests taking two snapshots of the blockchain and directing most of the new tokens in favor of those who held LUNA before untying UST and did not sell after.