The Korea Financial Services Commission (FSC) has referred two cases of virtual asset market manipulation to the prosecution. This is part of the expansion of encryption market enforcement in the Republic of Korea, with a focus on lifting goods, fraudulently active transactions and unusual currency fluctuations at small market values.
Two cases were referred to the prosecution
FSC indicated that both cases had been approved for transfer at a regular meeting held on 1 July. According to the regulator, the transactions distorted prices and attracted bulkers to enter between high-risk areas.
The first case concerned a large currency holder. According to the Supervisory Authority, within about two months, the individual had used large sums of money in an attempt to control the price of a coin that was also listed on an exchange both inside and outside Korea. The second case involved another suspect, who was allegedly sold for profit through the API billing and the high-priced web page, which created the illusion that the transaction was active.
First Dao pulls him overseas and then leads Korea.
According to the FSC, the first suspect used tens of billions of won to buy up a hold that was close to half of the global circulation of the coin, thus gaining a dominant position in the market and creating artificial purchasing pressure.
According to the Supervisory Authority, the individual first pushed for currency increases on overseas exchanges and then passed price fluctuations on to local Korean platforms to attract Korean investors to follow up on purchases. Although it suffered losses in overseas markets, it received higher returns on the Korean platform and ultimately more losses fell on Korean investors.
API, deal number two.
The second case focused on an ultra-short-wire manipulation of a so-called pickle coin. The FSC states that the suspect repeatedly submitted a small market purchase order in seconds through the API channel, while the price of the currency was pushed up by the high price limit billed through the web channel.
After attracting other buyers, the suspect sells the lock-in proceeds in bulk. The regulator noted that small market values, thin tokens of order books, are more likely to fluctuate sharply when a few accounts dominate transactions.
- Prices rose for no apparent reason.
- Largely magnified when the trade volume is short
- A small number of accounts are in the lead.
FSC reminds investors not to pursue virtual assets that have suddenly increased for no reasonable reason. The regulator also warned that if the market was driven up by large households, prices could fall quickly once they were sold centrally.
The Republic of Korea has continued to strengthen relevant law enforcement in recent years. In January 2025, the Korean prosecution arrested two people in connection with the Bithumb related price manipulation case, which also involved suspected violations of the Virtual Asset User Protection Act.
FSC indicated that follow-up would improve the early warning system for the centralization of transactions for a small number of accounts and upgrade investigative tools to allow for faster identification of unfair transactions and reduce the impact of similar events on investors.