South Korea Targets Crypto Price Manipulation in First Action Under New Act

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As a researcher, I’ve uncovered evidence suggesting potential price manipulation within the virtual asset market. This information has been reported to the relevant authorities, specifically the Financial Services Commission (FSC) and Financial Supervisory Service (FSS), who have subsequently forwarded the case to the prosecution for further investigation.

For the very first time, a case has been handled according to the established investigation procedures under the recently implemented Virtual Asset Act, which went into effect on July 19, 2024. The case unfolded in an orderly fashion. Initial suspicions were raised by virtual asset trading platforms regarding unusual transactions. Subsequently, financial regulators scrutinized the matter, it was discussed by the Virtual Asset Market Investigation Deliberation Committee, and ultimately, the Financial Supervision Commission made a decision to resolve it.

Crack Down on Virtual Asset Market Manipulation

As stated in the official press announcement dated January 16th, the individual under investigation allegedly used a well-known short-term market manipulation strategy consisting of these three elements: preliminary buying, price control, and final selling off.

To start, an individual bought a large amount of certain digital currencies. Afterward, they attempted to control the market by rapidly placing numerous buy orders, which increased prices and trading volume deceptively, giving the impression of active market activity. The country’s financial regulators clarified this action. As prices escalated, the suspect quickly sold all their holdings, thereby concluding the manipulative cycle in approximately ten minutes. This manipulation reportedly led to sudden fluctuations in the previously stable digital currencies’ prices.

It’s thought that the suspect amassed a large sum of money, approximately several hundred million won, through these transactions over the course of a month in an illegal manner. As transaction volumes grow and the virtual asset market experiences more price fluctuations, worries about the spread of such unjust trading activities are increasing. Financial regulators have advised users to be cautious, as dramatic price increases can result in sudden drops.

In order to address these problems, financial regulators are strengthening their investigation mechanisms and encouraging trading platforms to closely scrutinize unusual transactions. Additionally, plans are being made to refine market infrastructure, such as improving the process for listing companies and enhancing transparency in disclosures.

Increased Crypto Adoption

In simpler terms, the use of digital currencies like Bitcoin and Ethereum is rapidly growing in South Korea. This growth has been amplified by positive statements about cryptocurrency from Donald Trump. Due to this heightened market action, South Korean authorities are approaching the situation with caution.

This week, the Financial Services Commission (FSC) convened their second Virtual Asset Committee meeting to tackle the recently implemented crypto investor protection regulations in the country. Vice Chairman Kim So-young shared that the matter of corporate account approvals has been thoroughly scrutinized across 12 subcommittee and task force sessions, and is now close to reaching a final policy decision.

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2025-01-17 01:14