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Korean congressman wants to launch a fund to help struggling crypto investors

A South Korean politician wants the government to create a special fund to help crypto investors suffering losses in the market – and says crypto exchanges should accept the bill.

News1 reported that Kim Byung-wook, an MP for the opposition Democratic Party, told a group of blockchain industry leaders and financial regulators at a summit that trading platforms Leading providers should launch an “investor protection fund”.

He is quoted as saying:

If exchanges create [such] a fund, the market will grow healthier and investors will be more protected – even before new regulatory measures are introduced.”

The government has repeatedly voiced the need to strengthen crypto investor protections after thousands of citizens suffered heavy financial losses at the start of the bear market in May. “The LUNAC/ Terra,” as South Korean lawmakers and media pundits have called it, has the potential to become a catalyst for major regulatory reform.

The government has announced that it will create a special bill to regulate the market – and will put investor protection at the heart of this new law.

However, Mr. Kim warned that Seoul should not focus too much on protecting investors. He stated that too limited efforts will hinder the ability of the crypto industry to grow.

Kim added:

If we focus only on the negative aspects of the crypto market, domestic wealth could flow abroad. Simply suppressing the domestic market will not stop people from investing [in crypto].

He added that politicians and regulators now “need to approach [cryptocurrency] futures and margin trading from a new perspective.”

And Kim added that previous government legislative efforts to prevent non-Koreans from using domestic exchanges were misguided.

He called for an urgent review of the policy, alluding to that banning overseas crypto users from using South Korean trading platforms has not done much to help the domestic crypto sector grow. .

Meanwhile, in an exclusive article, Seoul Kyungjae reported that Uprise, a domestic cryptocurrency company previously received backing from internet giant Kakao and heavyweight banks Shinhan and Kookmin , lost 99% of its clients’ funds by placing large bets on LUNAC futures prior to the cataclysmic crash in May.

AI technology took a short position on LUNAC at the exact time of the crash, the media explained, but the sudden pumping that followed the initial price drop closed the fate of the crash. place a bet.

Uprise, which hinted it might consider trying to compensate its customers, blamed the incident on “unexpectedly high levels of volatility in the market.”

Uprise has billed itself as a crypto futures trading platform using AI-powered bot technology. But its bots were powerless to stop customers’ $20 million worth of money from going up in smoke.

The company has stated that removing the human element from crypto trading can “minimize” the “risks” associated with cryptocurrencies, but as the paper put it, “even AI technology can had no choice but to suffer losses as unprecedented turmoil hit the market” as LUNAC crashed in early May.

The media concluded that “skepticism” about bots and AI-powered technology “in the crypto market” “is expected to increase in the future.”