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| An electronic board shows the prices of Luna and other cryptocurrencies at a Bithumb customer service center in Seoul, Friday. Yonhap |
By Lee Min-hyung
Cryptocurrency exchanges here and abroad are on track to delist Luna, as the value of the sister token of scandal-tainted stablecoin Terra tumbled to near zero with no signs of a rebound.
Gopax, one of Korea's major exchange operators, was the first to make the decision. Starting from 3 p.m. Monday, trading of Luna and Terra will not be possible through the firm's platform.
Upbit and Bithumb, two of the nation's largest exchanges, followed suit, as part of efforts to minimize further losses of investors. Upbit will no longer support trading services for Luna on May 20, with Bithumb aiming for May 27.
Last week, Binance, the world's largest crypto exchange, also suspended trading of Terra and Luna, but resumed their trading with a warning to investors.
The decisions from the exchanges came in the wake of escalating fears over Luna's price fall. Luna was traded at as high as 144,000 won at one time in early April, according to data from CoinMarketCap. Luna won the spotlight from global crypto investors amid soaring demand for UST due to Terra's savings protocol that offered 20 percent in annual percentage yields.
But with UST failing to defend its $1 peg early last week, Luna's price fell sharply to near-zero in only a few days.
Given that only a few cryptocurrencies have bounced back after losing market trust, it appears unlikely for UST and Luna to regain momentum for a rally.
For now, Luna and UST investors cannot be compensated by the crypto developer. That is why Luna's collapse is fueling concerns over the credibility of other stablecoins, as crypto investors cannot be protected by the government due to legal ambiguities of the market.
"Investors will likely pay more scrutiny to the risks surrounding stablecoins and their reserve attestations given that UST's problems have sparked wider crypto market volatility," said Monsur Hussain, senior director at Fitch Ratings.
"It is unclear what impact this will have, but it could result in stablecoins with a lower risk profile gaining market share, or weaker investor appetite for stablecoins in aggregate."
Do Kwon, co-founder of Terraform Labs which developed UST and Luna, shared details of a revival plan, suggesting the reset of Terra's blockchain by distributing its network ownership to UST and Luna holders.
Financial watchdogs here ― the Financial Supervisory Service and Financial Services Commission ― also launched an inspection Sunday into the incident and are stepping up monitoring for any unusual signs in the market.
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