The Bank of Korea(BOK) warned that unfair transactions in the domestic virtual assets market are possible as exchanges control all aspects of their trade including mediation, listing, payment and deposits.

In a report on Thursday, the central bank attributed the collapse of the stablecoin TerraUSD and its sister token, Luna, last year due to a failure in the price stability structure and an operation model that depended on the continued inflow of capital.

The BOK said that such a downfall is unlikely to reoccur in the country following the adoption of stringent regulations.

It raised concerns, however, over possible investor losses from excessive marketing amid aggravated competition between 27 local virtual asset exchanges.

The central bank mentioned that as these exchanges themselves take on the role of market maker, it may lead to market manipulation and a lack of transparency in review standards and listing and delisting procedures.