South Korean regulators are looking into Terra's 'vortex of death.'

On Tuesday, the National Assembly of South Korea met to debate the consequences of the Terra collapse, with officials from domestic crypto firms in attendance.

South Korea | Image: Wikipedia

South Korea's financial regulators met on Tuesday to discuss how to deal with the aftermath from the TerraUSD stablecoin's collapse earlier this month.

According to local news sources, the Financial Supervisory Service (FSS), the Fair Trade Commission (FTC), and the Financial Service Commission (FSC) exchanged updates following an emergency meeting at the National Assembly.

TerraUSD, an algorithmic stablecoin on the Terra blockchain with the ticker UST, catastrophically de-pegged from the dollar this month, wiping out more than $40 billion in value for investors.

YNA News said that the Financial Intelligence Unit, the FSC's investigations unit, called to the occurrence as a "vortex of death," which saw the supply of LUNA rise in an effort to stabilize UST's price.

In addition, FIU also noted that there were 100,000 LUNA holders in Korea prior to the collapse, with a rapid surge to 180,000 in the ten days following the UST's loss of peg.

According to Money Today, the FSS announced on Tuesday that it intended to audit the premises of companies that provide financial services related to the Terra blockchain following its collapse.

Chan-woo Lee, senior vice president of the FSS, said after the event that the chance of the crisis reaching traditional financial markets was still minimal, and that on-site investigations will be done to mitigate the risk.

These inspections will focus on Terra-related payment services, including how they are maintained, the status of withdrawal cash, and the safeguards in place to protect users.