After the Terra disaster, South Korea established a “standardization” to control cryptocurrencies

Avoid Risks Like Second Terra Financial Supervisory Services are working to standardize risk assessment for virtual assets.

Standardization was created to avoid the 2nd Terra risk

The standardization work carried out by the Financial Supervisory Service is only in its early stages, but it is expected that a unified rating system can be ordered from the virtual asset exchange after the design is completed. Legally prepared so that there will be no more incidents like Terra.

According to financial authorities and the financial investment industry, on the 25th, the Financial Supervisory Service decided to analyze the risk characteristics of virtual assets in the country to manage risks in the financial market. In addition, it is checking whether there is a transfer of risk to the financial needs related to the Terra incident and strengthening supervision of the virtual asset market at home and abroad.

To analyze the risk characteristics of virtual assets in the country, FSS plans to entrust the research service first to institutions that are trusted by the public. The research service commissioned by the Financial Supervisory Service is standardization of modeling work to measure the risk of virtual assets. When the coin is released, the white paper is removed. Still, the Lack of information and difficulty in evaluating makes it difficult for investors to assess the coin’s value. Accordingly, it is challenging to protect investors legitimately.

First, the Financial Supervisory Service plans to remove the method currently evaluated by exchanges in different ways and unify them. The aim is to ensure that investor protection is systematically possible only when the coins are evaluated against the same model.

Currently, there is no way to enforce regulatory modeling. Still, it is hoped that virtual asset exchanges will be able to recommend that they follow a standardized model as the regulatory system is matured in the future. 

DISCLAIMER: The Information on this website is provided as general market commentary and does not constitute investment advice. We encourage you to do your own research before investing.

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