A South Korean politician wants the federal government to produce a special fund to assist crypto investors who’ve endured losses within the markets – and states that crypto exchanges should feet the balance.
News1 reported that Kim Byung-wook, an MP for that opposition Democratic Party, told several blockchain industry leaders and financial regulators in a summit that leading buying and selling platforms should launch an “investor protection fund.”
He was quoted as saying:
“If exchanges produced [such] a fund, the marketplace would develop more soundly and investors would enjoy greater protection – before new legal measures are introduced.”
The federal government has frequently discussed the necessity to boost crypto investor protection after a large number of citizens sustained heavy financial losses at the beginning of the bear market in May. The “LUNAC/Terra incident,” as South Korean lawmakers and media professionals have dubbed it, will probably be a catalyst for major regulatory reform.
The federal government has mentioned that it’ll produce a special bill to manage the marketplace – and can place investor protection in the centre of the new law.
However, Kim cautioned that Seoul shouldn’t become too centered on protecting investors. He mentioned that excessively restrictive efforts would stifle the crypto industry’s capability to grow.
Kim added:
“If we simply concentrate on the negative facets of the cryptocurrency market, domestic wealth could flow abroad. Simply suppressing the domestic market won’t stop individuals from investing [in crypto].”
He added that politicians and regulators now “need to approach [crypto] futures and margin buying and selling from the new perspective.”
And Kim added the previous government’s legislative tries to stop non-Koreans by using domestic exchanges were misguided.
He known as to have an urgent overview of this insurance policy, meaning that barring overseas crypto users from using South Korean buying and selling platforms was doing little to assist the domestic crypto sector grow.
Meanwhile, within an exclusive article, Seoul Kyungjae reported that Uprise, a domestic crypto firm which has formerly received backing from the web giant Kakao and also the banking heavyweights Shinhan and Kookmin, lost a watch-watering 99% of their clients’ funds by betting big on LUNAC futures just before May’s cataclysmic crash.
The AI technology had a brief position on LUNAC in the exact duration of the crash, the press outlet described, but sudden pumps that adopted the first cost slump sealed the bet’s fate.
Uprise, which hinted that it could consider trying to compensate its customers, blamed the incident on “unexpectedly high amounts of volatility on the market.”
Uprise had billed itself like a crypto futures buying and selling platform that utilized AI-powered bot technology. Nevertheless its bots were powerless to prevent some USD 20 million price of client funds from rising in smoke.
The firm had claimed that taking out the human element from crypto buying and selling could “minimize” crypto-related “risk,” but, because the newspaper place it, “even AI technology didn’t have choice but to incur losses when unparalleled turbulence hit the market” as LUNAC crashed at the begining of May.
The press outlet figured that “skepticism” concerning the bot and AI-powered technology “in the cryptoasset market” was “expected to develop later on.”
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Find out more:
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