Terra/Luna collapse (May 2022)
Terra's algorithmic stablecoin UST lost its dollar peg in May 2022, wiping out about $40 billion in market value. South Korean retail investors, many of them young and heavily leveraged, were among the hardest hit.
Korean regulators tightened rules on crypto exchanges, custody, and investor protection.
The collapse shaped the Virtual Asset User Protection Act and left Korean authorities wary of stablecoin-driven capital flows.
Explains why Korean regulators watch stablecoin outflows closely and why a yen corridor drawing won out of the country would draw scrutiny.
