The Financial Supervisory Service (FSS) of South Korea will perform an on-site inspection of Terraform Labs and financial services linked to TerraUSD (UST) or LUNA.

See related article: Are we heading for a post-Terra crypto winter?

Fast facts

• The FSS said at an emergency National Assembly meeting on Tuesday that the audit aims to prevent damages from the Terra-LUNA debacle from spilling into the financial market.

• South Korean regulators have been operating with a higher sense of urgency since local investors have reportedly lost hefty sums of savings in the UST de-pegging incident.

• The financial authority said it intends to tap into a third-party institution to enhance its monitoring of domestic and global crypto markets.

• The FSS added it plans to categorize cryptocurrencies according to risk types.

• Managing digital assets and industry risk is limited due to insufficient legislation, speculative transactions, and inadequate disclosures of information such as white papers, the FSS said.

• The Korea Fair Trade Commission (KFTC) also pledged at the Tuesday meeting to examine “unfair” terms and conditions in local cryptocurrency exchanges.

See related article: South Korean authorities cite LUNA debacle to call for speedier crypto oversight