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

South Korean monetary authorities – Monetary Providers Fee (FSC) and Monetary Supervisory Service (FSS) – reported a suspect of value manipulation within the digital asset market to the prosecution.

This marks the primary case processed by way of formal investigation procedures beneath the newly enforced Digital Asset Act, efficient July 19, 2024. The case adopted a structured course of. Irregular transactions have been first reported by digital asset exchanges. It was then investigated by monetary authorities, deliberated by the Digital Asset Market Investigation Deliberation Committee, and resolved by the FSC.

Crack Down on Digital Asset Market Manipulation

In keeping with the official press release on January sixteenth, the indicted suspect employed a traditional short-term value manipulation tactic involving three steps: advance buy, value manipulation, and full liquidation.

The person initially bought a major amount of particular digital belongings after which manipulated the market by quickly submitting purchase orders to artificially inflate costs and buying and selling volumes, making a false notion of market exercise, the monetary watchdogs of the nation defined. As soon as costs rose, the suspect offered off all holdings, finishing the manipulative cycle inside roughly ten minutes. This manipulation reportedly prompted abrupt value spikes and drops in digital belongings that had been steady.

The suspect is believed to have illicitly profited a number of hundred million received over a month by way of these transactions. With rising transaction volumes and elevated value volatility within the digital asset market, issues concerning the enlargement of such unfair buying and selling practices are mounting. The monetary authorities have urged customers to train warning, as speedy value surges can result in sudden crashes.

To fight these points, monetary authorities are enhancing investigation techniques and urging exchanges to ramp up their monitoring of irregular transactions. Plans are additionally underway to enhance market constructions, together with itemizing and disclosure techniques.

Elevated Crypto Adoption

South Korea is witnessing a major surge in cryptocurrency adoption which has been additional fueled by Donald Trump’s pro-crypto coverage bulletins. This elevated market exercise has led South Korean regulators to undertake a cautious stance.

This week, the FSC held its second Digital Asset Committee assembly to deal with the nation’s new crypto investor safety legal guidelines. Its Vice Chairman Kim So-young said that the problem of company account approvals had undergone in depth assessment by way of 12 subcommittee and activity drive discussions, and is nearing a coverage conclusion.