The UK market watchdog is closely watching the chaos in the crypto markets following the Terra incident. Sarah Pritchard, executive director of markets at the country’s Financial Conduct Authority, said the recent instability in the stablecoin market “absolutely needs to be taken into account” when the regulator starts working with the Treasury Department later this year to develop and implement new rules for crypto assets.

If it works well, innovation will continue, Pritchard said, and it's clear that we've seen the consequences and some of the problems that can arise. Additionally, Pritchard cites an Opinium survey released by the FCA in October saying that nearly 70 percent of adults aged 40 or younger who buy cryptocurrencies incorrectly believe digital assets are regulated.