South Korea’s FSC has referred two cases of virtual currency market manipulation to local investigative authorities. The suspects accumulated tens of billions of Korean won worth of virtual currency in advance and mobilized hundreds of billions of Korean won by repeatedly submitting high-value orders.
According to the report, the commission explained that the suspects in the first incident are suspected of mobilizing hundreds of billions of Korean won to artificially inflate the price of virtual currency to the target level through high-value purchases. They placed a sell order at a higher price than the buy price and manipulated the trade so that the price of the cryptocurrency reached the price of the sell order. The Financial Supervisory Agency discovered this incident during its regular cryptocurrency monitoring activities.
Unsuspecting users assumed the price was rising naturally and bought into the ruse, buying more coins as the price skyrocketed and reached their pre-submitted sell orders. They reportedly obtained tens of billions of Korean won in illegal profits through this fraud.
In the second incident, the suspects used an API (automated trading program) to inflate trading volume. They repeatedly executed market price buy and sell orders for specific cryptocurrencies several times per second over an undisclosed period of time. The suspects also manually placed large buy orders to make it appear that prices were rising.
The suspect manipulated the screen to mimic active trading.
The FSC said the suspects in the second incident are suspected of exploiting visual effects on exchange screens, taking advantage of the common user perception that a frequently flashing red line indicates active trading. Whenever the price of a particular cryptocurrency changes, the current price border turns into a red line, indicating an increase in price.
The Financial Services Commission called on investors to exercise caution if the price of illiquid cryptocurrencies rises or the trading volume increases sharply, as the price may plummet due to a correction. It also warned that those who use fraudulent means to artificially attract buying and selling interest or manipulate prices through high-priced sell or buy orders will be subject to fines and fines under the Virtual Asset User Protection Act (VAUP).
FSC announced On November 4, the government announced that the cabinet had approved a bill to revise the enforcement order for the special law regarding the repayment of losses. The amendments aim to strengthen the responsibility of financial companies to prevent losses from financial fraud.
FSC freezes $61.4 million worth of cryptocurrencies over 6 years
The FSC recently revealed that it has frozen approximately $61.4 million worth of digital assets across multiple crypto trading platforms over the past six years in an effort to combat crypto fraud. The total amount was revealed in a report submitted to MP Wi Sung Gun’s office, highlighting the commission’s continued efforts to combat crypto-related crimes. Most freezes are due to suspected fraud or violations of the VAUP Act.
The filed report confirmed that the frozen crypto assets include $37.4 million worth of crypto assets that were affected by Bithumb’s 2020 withdrawal suspension. The suspensions were related to 8,666 fraud cases.
The FSC also froze $18.9 million worth of crypto assets in 30,106 cases from 2020 to September of this year. Regulators also froze $4.4 million worth of cryptocurrencies blocked on the Coinone exchange in connection with 755 incidents. Nearly $296,000 related to 529 cases was also frozen on Korbit, and an additional $222,000 related to approximately 280 local regulatory violations was frozen on the Gopax exchange.
South Korea recently updated its crypto regulations covering stablecoins, investor protection, mining, interest rates and lending, and travel rules, creating a robust regulatory framework for the domestic crypto industry.
Meanwhile, the Act on Reporting and Use of Specified Financial Transaction Information requires strict AML (anti-money laundering) measures, exchange registration, and real-name virtual currency platform accounts linked to verified bank accounts.
The FSC’s records over the past six years reveal that the South Korean government is stepping up efforts to clean up the crypto sector. Actions across Korbit, Bithumb, Coinone, and Gopax demonstrate continued regulatory enforcement in this country. of revision The enforcement order will take effect six months after its promulgation.
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