South Korean lawmaker wants to launch a fund to help struggling crypto-investors
A South Korean politician wants the government to set up a special fund to help crypto investors who have suffered losses in the markets – and says that crypto exchanges should pay the bill.
News1 reported that Kim Byung-wook, a Democrat for the Opposition Party, told a group of blockchain industry leaders and financial regulators at a summit that leading trading platforms should launch an “investor protection fund.”
He was quoted as saying:
«If exchanges created [such] a fund, the market would develop more solidly and investors would benefit from greater protection – even before new legal measures are introduced. “
The government has repeatedly talked about the need to increase the protection of crypto investors after thousands of residents suffered major financial losses at the start of the bear market in May. The “LUNAC / Terra incident”, as South Korean lawmakers and media people have called it, is likely to be a catalyst for major regulatory reforms.
The government has stated that it will make a special bill to regulate the market – and will put investor protection at the center of this new law.
However, Kim warned that Seoul should not be too focused on protecting investors. He stated that overly restrictive efforts would stifle the crypto industry’s ability to grow.
Kim added:
“If we focus only on the negative aspects of the cryptocurrency market, domestic wealth can flow abroad. Simply suppressing the domestic market will not stop people from investing [in crypto]. “
He added that politicians and regulators now “must address [crypto] futures and margin trading from a new perspective. “
And Kim added that the previous government’s legislative attempt to stop non-Koreans from using domestic exchanges was misunderstood.
He called for an early review of this policy, suggesting that preventing foreign crypto users from using South Korean trading platforms did little to help the domestic crypto sector grow.
Meanwhile, in an exclusive article, Seoul Kyungjae reported it Uprisinga domestic crypto company that has previously received support from the internet giant Cocoa and banking heavyweights Shinhan and Kookminconspicuously lost 99% of customers’ funds by investing heavily in LUNAC futures before May’s catastrophic crash.
AI technology had taken a short position on LUNAC at the exact time of the crash, the media explained, but sudden pumps that followed the first price drop sealed the fate of the effort.
Uprise, which suggested they may consider trying to compensate their customers, accused the incident of “unexpectedly high levels of market volatility.”
Uprise had billed itself as a cryptocurrency trading platform using AI-powered bot technology. But their robots were powerless to stop client funds worth $ 20 million from going up in smoke.
The company had claimed that removing the human element from crypto trading could “minimize” crypto-related “risk”, but, as the newspaper said, “even AI technology had no choice but to incur losses when unique turbulence hit the market” such as LUNAC crashed in early May.
The media concluded that “skepticism” about the bot and AI-powered technology “in the cryptocurrency market” was “expected to grow in the future.”
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Learn more:
– New South Korean regulator promises more ‘justice’ for crypto investors
– South Korean crypto exchanges prepared to self-regulate, says the ruling party
– Media and police are investigating cryptocurrencies as family was found dead in the South Korean Sea
– South Korean bankruptcy court warns of upcoming increase in crypto-related cases
– Neobank K-Bank may have to postpone the IPO plan as crypto winter bits
Terraform officials banned from leaving South Korea as Do Kwon ‘can apply for Singaporean citizenship’
