UK Regulator Scrutinizes Terra Fallout as It Mulls Crypto Rules

The UK’s market regulator is paying close attention to the chaos in crypto markets after the implosion of Terra, one of the biggest experiments in decentralized finance.

The recent market instability in stablecoins “will absolutely need to be taken into account” when the watchdog starts working with the Treasury to develop and implement new rules for cryptoassets later this year, said Sarah Pritchard, executive director for markets at the Financial Conduct Authority.

“Innovation lasts if it works well, and clearly, we’ve seen the consequences and some of the issues that can arise,” Pritchard, who oversees the FCA’s work on ...