South Korean Congressman summons Do Kwon and exchange executives: The truth behind Luna's collapse

At a time when blockchain technology is developing rapidly, the volatility of the digital currency market has attracted global attention. In particular, the collapse of Luna coin has not only caused countless investors to suffer heavy losses, but also attracted great attention from the South Korean Congress. Recently, South Korean Congressmen held a hearing and summoned Luna's founder Do Kwon and executives of related exchanges to try to uncover the truth behind this financial disaster. This article will delve into the background, impact and implications of this incident for future digital currency regulation.

First of all, the collapse of Luna coin is not an isolated incident, but a microcosm of the increased volatility in the digital currency market. As an algorithmic stablecoin, Luna's value is pegged to the US dollar, and its original intention was to solve some problems in the traditional financial system. However, with the crazy speculation and irrational investment behavior in the market, Luna's value experienced huge fluctuations in a short period of time, which eventually led to its collapse. Many investors lost their entire investment in just a few days, which undoubtedly aroused public anger and dissatisfaction.

At the hearing, congressmen asked Do Kwon pointed questions, questioning his responsibility in the Luna collapse. Do Kwon appeared very calm in the face of doubts, trying to explain the incident with the complexity of technology and the market. However, many investors did not buy it. They believed that Do Kwon, as the founder of the project, should bear part of the responsibility for the investors' losses. Members of Congress called for strengthening the supervision of the digital currency market to ensure that similar incidents do not happen again.

At the same time, executives of related exchanges were also summoned to the hearing. As intermediaries for digital currency transactions, the role of exchanges cannot be ignored. Many investors did not receive adequate risk warnings before the crash, which made them lack the necessary vigilance when investing. Members of Congress asked exchange executives to provide more information about the measures they took in the Luna transaction and the protection mechanism for investors. Exchange executives said at the hearing that they would continue to adjust risk control measures according to market conditions, but they did not foresee such drastic fluctuations in response to Luna's crash.

As the hearing progressed, more and more details surfaced. Many investors had seen some false propaganda and false information before Luna's crash, mistakenly believing that Luna was a safe investment project. The spread of this information not only affected investors' judgment, but also reflected the lack of supervision in the digital currency market. Members of Congress expressed strong dissatisfaction with this and called on the government to establish a sound regulatory system as soon as possible to protect the legitimate rights and interests of investors.

At this hearing, in addition to questioning Do Kwon and exchange executives, members of Congress also conducted an in-depth analysis of the overall ecology of the digital currency market. With the rise of digital currency, many investors are full of expectations for it, but the volatility and uncertainty of the market also make them feel scared. How to find a balance between innovation and risk has become a difficult problem for regulators.

Globally, the regulation of digital currency is gradually strengthening. Governments have introduced policies to meet the challenges of this emerging market. As a country with active digital currency transactions, South Korea's regulatory policy changes have attracted much attention. After the Luna collapse, the South Korean government has begun to re-examine the regulatory framework of digital currency, striving to promote technological innovation and development while protecting investors.

In this context, members of Congress put forward a series of suggestions, including strengthening due diligence on digital currency projects, establishing a transparent information disclosure mechanism, and improving the investor education system. Investor protection not only relies on the improvement of technology, but also requires the protection of laws and regulations. Only through effective supervision can investors get better protection in this market.

At the end of the hearing, members of Congress said that they would continue to pay attention to the follow-up development of the Luna collapse and promote the implementation of relevant policies. They hope that through this incident, they can attract the attention of all sectors of society to the digital currency market and prompt more investors to realize the importance of risks. At the same time, they also called on investors to remain rational and make prudent decisions when participating in digital currency investment.

In general, the Luna collapse is not only a financial crisis, but also a warning to the entire digital currency market. As more investors pour into this field, the complexity and risks of the market are also increasing. How to find an optimal balance between innovation and regulation is a challenge that the digital currency market must face in the future. Only by strengthening supervision and improving transparency can we truly protect the rights and interests of investors and promote the healthy development of the digital currency market.

When we think about these issues, we might as well review the lessons of the Luna collapse and remind ourselves to be vigilant while pursuing wealth. The digital currency market is like a vast ocean, with turbulent waves and the possibility of stormy waves at any time. Only those investors with sufficient knowledge and risk awareness can ride the wind and waves in this sea and find their own course.

With the continuous development of digital currency, the future market will be more complex and changeable. As investors, we should not only pay attention to market dynamics, but also pay attention to changes in policies and regulations. Only in this way can we remain invincible in the ever-changing market. I hope that every investor can learn a lesson from this incident, invest rationally, and make wise decisions.

The four most famous international exchanges:

Binance INTL	OKX INTL	Gate.io INTL	Huobi INTL
China Line　APP DL	China Line　APP DL	China Line　APP DL	China Line　APP DL

Note: The above exchange logo is the official website registration link, and the text is the APP download link.

The algorithmic stablecoin UST and Terra's native token LUNA suffered a devastating blow last week, causing a large number of users to lose money, and there were even reports that some people committed suicide due to the loss. According to a report by the local Korean media NewsPim, at the plenary meeting of the Political Committee of the Korean National Assembly held today (17), Yun Changhyun, a member of the National Power Party, questioned the behavior of some exchanges during the plunge of Luna and UST. He mentioned that local exchanges Coinone, Korbit and Gopax stopped trading on May 10, Bithumb stopped trading on May 11, but the largest exchange in South Korea did not stop trading until May 13. He pointed out: Even if the token price falls, the exchange will make a profit. Upbit was the last company to stop trading after seeing the collapse of LUNA. It is the number one company in South Korea with an 80% share... In just three days, they earned nearly 10 billion won in commission income. (about $7.86 million)

He stressed that as legislation was delayed, investors' losses were increasing, but the authorities continued to turn a blind eye to the huge losses of digital assets, and further stated: We should summon LUNA representative Do
Kwon and related executives to the parliament to hold a hearing on the reasons for the current situation and measures to protect investors.

According to Yonhap News Agency today, the Financial Supervisory Commission (FSC) and the Financial Supervisory Service (FSS) of South Korea have recently asked local cryptocurrency exchanges in South Korea to share transaction information related to UST and LUNA, including trading volume, closing price, number of related investors, etc. At the same time, the regulator also asked the exchange to provide countermeasures for the crash and analyze the causes of the crash.

Hedge fund founder: Luna is an encrypted version of MLM, posing a threat to the encrypted ecosystem

Bill
Ackman, a well-known hedge fund investor and founder of PershingSquare Capital, posted on his Twitter earlier today: When I read Terra's algorithm, it sounded like the encrypted version of a pyramid scheme. Investors are promised a 20% return backed by tokens, but the value is driven only by the tokens, the demand of new investors, and there is no fundamentals under the business model.

Ackman believes that blockchain is an outstanding technology with great potential, but projects like LUNA threaten the entire cryptocurrency ecosystem. The crypto industry should regulate itself and stay away from other crypto projects that have no potential business model. The hype of tokens issued by companies that do not create value will eventually destroy the entire crypto industry.