South Korea Investigates Over 40 Cases of Unfair Crypto Trading, Including Market Manipulation
Financial authorities report 30 cases to investigative agencies, identifying 25 suspects since the Virtual Asset User Protection Act's enactment.
Quick Look
- South Korea's financial authorities investigated over 40 cases of unfair crypto trading, including market manipulation and fraudulent activities, in the last two years.
- Since the Virtual Asset User Protection Act took effect in July 2024, 30 cases were reported to investigative agencies, leading to 25 identified suspects and average unlawful gains of ₩1.4 billion.
AI-generated summary
Why It Matters
The Virtual Asset User Protection Act, enacted two years ago and effective July 2024, aims to bring the virtual asset market into a legal framework and establish user protection systems. It mandates VASPs to separate user deposits and virtual assets from corporate holdings and hold client deposits in banks.
South Korea’s financial authorities investigated more than 40 cases of unfair trading, including market manipulation and fraudulent crypto trading, in the last two years.
According to an X post by Financial Services Commission Chair Lee Eog-won, 30 cases were reported to or referred to investigative agencies, which identified 25 suspects since the Virtual Asset User Protection Act took effect in July 2024.
Lee said the average unlawful gains were around 1.4 billion Korean won ($940,000).
“Today marks the second anniversary of the enactment of the ‘Virtual Asset User Protection Act...’ It was a meaningful time that brought the virtual asset market, which was outside the institutional framework at the time, into the fold of the law and created an opportunity to establish a user protection system for virtual assets,” Lee said, according to a machine translation of the post.
The Virtual Asset User Protection Act is designed to protect users who buy and store crypto assets with virtual asset service providers.
VASPs are legally required to separate user deposits and virtual assets from their own corporate holdings. They must also hold client deposits in banks.
The legislation also targets illicit activities such as insider trading, wash trading and market manipulation while expanding the Financial Services Commission’s authority to supervise and inspect VASPs.
“We will continue to enhance market surveillance investigation and monitoring systems based on AI, and proactively respond to high-risk areas,” Lee added.
What to Watch
AI outlook — possibilities, not facts
The Financial Services Commission will enhance market surveillance and monitoring systems using AI.
Very likely · Within months
Open Questions
- What are the specific outcomes of the 30 reported cases?
- Which specific VASPs or individuals were involved in the illicit activities?
- What is the timeline for implementing AI-based surveillance systems?
