South Korea’s new crypto law targets rapid price manipulation as the Financial Services Commission reports the first suspect under the Virtual Asset User Protection Act.
South Korea Enforces New Crypto Law Against Price Manipulation
South Korea has reported its first case under the Virtual Asset User Protection Act, accusing an individual of manipulating cryptocurrency prices. The Financial Services Commission (FSC) and the Financial Supervisory Service (FSS) announced the case on Thursday, marking a milestone in the country’s efforts to combat unfair trading practices in the digital asset market.
The suspect is alleged to have carried out a pump-and-dump scheme, artificially inflating cryptocurrency prices by purchasing significant amounts and placing rapid buy orders to boost trading volumes. This activity misled investors into buying the assets, creating sharp price increases. Once the price spiked, the suspect sold their holdings, generating significant profits, often within a 10-minute period. Initial estimates suggest the suspect earned billions of won over one month.
This enforcement follows a structured process established under the new regulatory framework, effective since July 19, 2024. Cryptocurrency exchanges flagged suspicious trading patterns, prompting investigations by financial authorities. The Virtual Asset Market Investigation and Deliberation Committee approved the case for prosecution, reinforcing transparency and accountability in the process.
Rising Concerns Over Market Manipulation
Authorities highlighted growing concerns about unfair trading practices in the volatile cryptocurrency market. Sudden price surges often signal manipulative activities, posing risks to uninformed investors.
To address this, the FSC and FSS are enhancing market surveillance systems, urging exchanges to improve detection mechanisms, and exploring reforms such as standardized listing and disclosure requirements.
Investors are advised to remain cautious about cryptocurrencies exhibiting sudden price and volume spikes. Authorities emphasized vigilance against pump-and-dump schemes and reaffirmed their commitment to creating a fair and transparent market environment.
For more updates on South Korea’s crypto regulations and market reforms, visit FSC Korea’s Official Website.