San Francisco: After a week-long mayhem in the global crypto exchanges that wiped out hundreds of billions of dollars, a senior official at the International Monetary Fund (IMF) has said that the regulators must put up guardrails to protect innocent investors.
The shocking implosion of the TerraUSD stablecoin and Luna cryptocurrencies last week threw many young investors into a panic, some of them saying their entire assets were blown up or even leaving suicidal messages.
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Kristalina Georgieva, the IMF’s managing director, said at the World Economic Forum’s annual meeting in Davos late on Monday defended the cryptocurrencies, with riders, reports South China Morning Post.
“It offers us all faster service, much lower costs, and more inclusion, but only if we separate apples from oranges and bananas,” she was quoted as saying.
“It is the responsibility of regulators across the globe to put up guardrails and offer education to protect investors,” she said in media reports.
Georgieva said that the world shouldn’t completely ban cryptocurrencies.
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The sudden meltdown dealt a crushing blow to many tech-savvy young investors who betted big on the algorithmic cryptocurrencies, seen largely as experimental, amid the recent boom in cryptocurrency assets.
The global crypto mayhem last week wiped out Bitcoin worth $3.5 billion — created to defend and support the TerraUSD (UST) stablecoin which saw a total crash — and no one has any idea how such a large sum of funds disappeared.
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Nearly 80,394 Bitcoin worth $3.5 billion were purchased by the Luna Foundation Guard, the non-profit organisation set up to promote the growth of the Terra ecosystem this year, according to Blockchain analytics firm Elliptic.
The UST coin is designed to retain a value of one US dollar at all times but was depegged last week, and fell to just 17 cents. Luna’s value collapsed in one of the most stunning crypto crashes ever recorded.
In total, over $15 billion in cryptocurrency value was wiped after the TerraUSD stablecoin collapsed.
(This report has been published as part of the auto-generated syndicate wire feed. Apart from the headline, no editing has been done in the copy by ABP Live.)