New Partnership to Investigate Cryptocurrency Frauds

In the wake of Terra's infamous scandal, international cooperation to scrutinize the stablecoin industry through joint efforts has become a priority for authorities worldwide. According to a recent article, South Korean Justice Minister Han Dong-hoon has discussed with US officials how to potentially enhance cooperation in fighting against financial crimes and security fraud.

Crypto Regulations: What's Next?

On Tuesday, Han Dong-hoon met with officials from the US Securities and Commodities Task Force in New York during his visit. The two sides agreed to cooperate on the investigation into potential crimes surrounding Terra's collapse, following his

The partnership seeks to strengthen information exchange across borders and increase efforts on crypto and other financial crimes. In particular, Terra - the project being investigated in both countries - is back in the spotlight:

“The two sides also agreed to share their latest investigation data on ongoing crypto cases, including the high-profile case surrounding the meltdown of stablecoin TerraUSD and its digital coin counterpart, Luna.”

Global authorities have been keeping a close eye on the collapse of Terra. Last month, Korean prosecutors started an investigation into the group, looking at possible fraud and market manipulation charges. The key member was even barred from leaving the country.

Meanwhile, the SEC - the top US securities watchdog - expanded its investigation of the Terra-based DeFi platform Mirror Protocol. The regulatory entity believed that the protocol could have violated the Securities Act by offering investors to transact tokenized versions of popular stocks such as Tesla and Airbnb.

The agency also investigated if Do Kwon, the co-founder and CEO of Terra, violated the investor-protection regulations when he promoted UST and Luna before they failed.

Cross-border partnerships are a way for companies to expand their business globally.

Last week, the UK and US issued a joint statement on strengthening regulatory outcomes for digital assets across jurisdictions. The authorities expressed concerns regarding the role of stablecoins and crypto-asset trading and lending platforms as the broader market downturn has revealed issues rooted in some problematic projects.

In the aftermath of the bull market, many crypto companies collapsed because they had overleveraged their assets. As the bear market hits, some firms have to file for bankruptcy or declare insolvency as their debts increase and their crypto positions are sold off.