UK regulators are now investigating Terra (LUNA), a nosedive that started during the recent crypto market chaos. The largest crypto on the market, Bitcoin, fell as low as $26k, while Terra plummeted by nearly 100%.
The regulators pay attention not only to the current LUNA dip, but also to the whole crypto market, in order to create new rules.
Sarah Pritchard, Financial Conduct Authority Executive Director for Markets, while commenting on the news said that the recent stablecoins instability in the market “will absolutely need to be taken into account”.
The team is however working on new rules to be implemented for crypto assets in the second half of the year.
Pritchard claimed:
‘’Innovation lasts if it works well, and clearly, we’ve seen the consequences and some of the issues that can arise.’’
Pritchard also pointed out that 70% of those aged 40 and under bought crypto assets on the assumption that they were regulated. Her comments came in the wake the fall of Terra (LUNA), and Terra USD, a stablecoin which maintains a $1-1 peg.
Pritchard also spoke out about crypto risks, saying:
“In the last week where we saw significant price movements, it brings that into the fore and it shows the importance of making sure that people understand that that is a risk of where they put their money.”
April saw the Treasury announce that it planned to inspect the crypto-market state in order to create regulations that will allow stablecoins to be issued and wallet provisions to be created.
We are still waiting for details about the forthcoming Market Bill announcement and Financial Services announcement. However, UK regulators will receive new power from the Treasury later this year. They will be responsible to all crypto asset regulations.
