If more governments are less crypto-friendly, short-term crackdowns can have long-term consequences. Terra and UST plunged to zero in an instant, wiping away tens of trillions of dollars in market capital. Many investors who have suffered losses have already filed lawsuits. Many industry leaders have warned that the regulatory pressure on cryptocurrency may increase.
South Korea
South Korea is the first to increase the pressure. South Korea is the most passionate country about cryptocurrency.
According to data, more that a third of the country’s citizens have invested in cryptocurrency. South Korea is also a top source of customers for many derivatives trading exchanges such as Bitget and Bybit. Although the new president attempted to relax some restrictions to appeal to younger voters in an effort to win support, there was strong opposition. Terra, which is known to have been created by South Koreans using Korean capital, has also been criticized.
This event cost the Korean community and its investors a lot of money. Hashed, the top venture fund, lost more than $3.5 billion. The government established a “Death” financial regulatory panel, the IRS is investigating taxes and the National Assembly requested that Terra CEO Do Kwonappear at hearings. Several law firms have also initiated class-action lawsuits. This casts doubt on South Korea’s future cryptocurrency policy friendliness.
Singapore
The Terra Foundation moved from South Korea to Singapore. This could lead to a lot more litigation.
In the past, Singapore was very crypto-friendly and attracted crypto institutions from around the globe, particularly from Asia and Greater China. It has been under pressure from other countries in recent years. This has led to targeted crackdowns. Binance and 3AC, , have moved to Dubai.
Singapore’s regulatory policies will likely tighten in the wake of Terra crash. Police have received reports from more than 1000 local Singaporean investors that they have lost their investment in the Terra project.
The USA
The center for cryptocurrency, DeFi and NFTs, has the largest number of capital-intensive and large-scale companies. However, there are also traditional central bankers, economists and veteran investors in the U.S. that have opposed cryptocurrencies.
The Treasury Department, Securities and Exchange Commision and other regulators revealed that they are trying to tighten regulations after the Terra collapse. China regulators have been closely monitoring the USDT-led stabilizecoin and the UST collapse may be an excuse for Chinese regulators, to increase their crackdown on stablecoins.
