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South Korean crypto exchanges Upbit and Korbit had promised to return transaction fees earned during the Terra-LUNA crisis as compensation to investors. However, the promise seems to be fading with no plans implemented yet by the crypto exchanges or an expert committee, an inquiry revealed.
After the inquiry, Upbit confirms establishing a committee soon to decide the fee amount and other compensations.
South Korean Exchanges To Refund Terra-LUNA Transaction Fees
South Korean institutional and retail investors lose billions during the Terra-LUNA crash. The South Korean exchanges including Upbit and Korbit decided to refund transaction fees and other charges incurred during the crash.
After almost 3 months, Upbit and Korbit are yet to announce any committee to decide the amount and any other commissions for refund, local media SBS BIZ reported on August 10.
Investors lose billions during the Terra-LUNA crash. Crypto exchanges criticized for promoting and marketing Terra’s UST stablecoin and LUNA ahead of the crash. In fact, the South Korean government’s investigations have revealed that UST and LUNA tokens increased massively during the crash.
Investors accused crypto exchanges of taking profit from transaction fees and other commissions and not blocking deposits and withdrawals of Terra tokens.
The total compensation from both exchanges in May accounts for approximately $30 million.
“We feel moral responsibility beyond legal responsibility for investment losses. Upbit will not decide how and where the Luna transaction fee will be used, but will form a separate committee composed of internal and external experts to discuss it together.”
Meanwhile, the amount of refund continues to decline as the Bitcoin (BTC) price dropped from the $30,000 level during the crash to below $23k. The fees are kept in Bitcoin wallets as per terms.
Major South Korean crypto exchanges will also set up a joint consultation body to prevent incidents similar to the Terra-LUNA crash. The plan for the joint consultation body is also pending.
After the report, Upbit came forward to disclose that “the commission is to be launched soon.”
South Korea’s Probes on TerraForm Labs and founder Do Kwon
South Korean prosecutors have conducted “search and seizure” in over 15 places, including crypto exchanges and the home and offices of co-founder Daniel Shin.
Authorities have also issued a “notification upon arrival” to Do Kwon and a “departure ban” to Daniel Shin and other Terra executives.
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