Will the Collapse of South Korean Blockchain Disrupt the Nation’s Crypto Space?

South Korea has a surging crypto market worth more than 200 billion dollars; the nation is home to around seven million customers and is the second largest after China in East Asia. However, the high adoption rate might be due to the volatility of the South Korean won and the strong digital culture.

Conversely, the collapse of Terra Luna crypto, managed by the Country’s entrepreneur Do Kwon; currently, an international fugitive, has rattled South Korea’s cryptocurrency industry.

South Korea has promised accountability and clarity in the cryptocurrency sector and is actively finding ways to regulate the crypto industry effectively. But, contrary, even with more guidelines being put in place, it does not indicate that it would disrupt the South Koreans’ appetite for digital assets.

The Government Calls for Guidelines

Several prominent leaders in South Korea believe that crypto projects are not transparent about the risks affiliated with these exchange platforms. For example, Terra Luna needed to be more transparent about operating a stablecoin.

The mistrust resulting from the company’s collapse has contributed to implementing better guidelines for the crypto industry to ensure the security of retail investors from criminals like Do Kwon.

A specialist in blockchain and Fintech regulations, Chloe Lee, has faith that such guidelines are being put in place due to the collapse of Terra Luna. In addition, the South Korean ruling party introduced a new bill to regulate cryptocurrency at the end of the previous year, showing signs of regulating several areas—one concerning the restrictions of unfair trades and user security.

In addition, Chloe Lee emphasized the need and importance of implementing these regulations as soon as possible. Regardless of the damage brought about by the collapse of Terra Luna, the disaster is not likely to hit a fatal blow to the Country’s crypto market.

Yoon Suk-yeol, the South Korean president, actively campaigns for blockchain innovation in the Country. A crypto-friendly framework is hoped to improve user security, and regulating crypto will boost the crypto industry’s growth.

The Future of the Crypto Industry after the Collapse of Terra Luna

South Korea attracted criticism during the collapse of Terra Luna, and it is speculated that about 280,000 individuals in South Korea had invested in Terra Luna. Some of whom are currently facing a financial crisis, conferring to the Financial Services Commission, the South Korean financial regulator.

Late last year, the Seoul prosecutors issued a warrant for Do Kwon’s arrest, charging him with the violation of capital market laws and fraud. The authorities believe that Do Kwon exited Singapore, where he was based when Terra Luna collapsed.

Instead, he traveled to Dubai and then to Europe. It is speculated that Do Kwon is believed to be in Serbia at the moment, but there are no indicators that Belgrade is seeking to deport him to Seoul.

The future for Do Kwon is currently on the scale, with law enforcement still in pursuit of getting him in front of the judges in Seoul. The collapse of Terra Luna alongside continuous disasters such as the collapse of FTX, one of the major crypto exchange platforms.

The government announced a need for better guidelines for the crypto industry. Various people claimed to have lost a fortune worth millions of dollars in cash due to the Terra Luna debacles.