The Financial Services Commission filed separate complaints with investigative authorities over a case in which hundreds of billions of won were mobilized to buy coins at high prices to lift coin prices to a target price, and a case in which an automated trading program (API) was used to inflate trading volume.
The Financial Services Commission (FSC) said on Feb. 5 that it held a regular meeting and resolved to file complaints with investigative authorities against suspects in two cases of virtual asset price manipulation.
According to the Financial Services Commission (FSC) investigation, the suspects pre-accumulated a specific virtual asset on the scale of several billions of won and placed sell orders at prices higher than their purchase prices. They then repeatedly placed high-priced buy orders by mobilizing hundreds of billions of won so that the virtual asset price could reach the sell order price. When ordinary users, mistaken that the coin price was on an upward trend, started buying, the price rose further and, in the end, the sell orders that the suspects had placed in advance were filled. They were found to have obtained illicit gains of several billions of won through this method. The Financial Supervisory Service detected this case during its virtual asset monitoring process.
Other suspects was found to have inflated trading volume by tens of millions of transactions by using an automated trading program to repeatedly place market buy and sell orders for a specific coin several times per second over tens of minutes. To make it appear as if prices were rising, they also repeatedly placed direct high-priced buy orders even while the automated trading program was operating. Once users, thinking that prices were rising, began trading, the suspects disposed of their holdings at higher prices. They was found to have obtained illicit gains of several hundreds of millions of won through this method.
The Financial Services Commission (FSC) believes they lured ordinary users into trading by exploiting a visual effect in which the border color of the "current price" on the exchange screen changes to a red line (price increase) whenever the price of a specific virtual asset changes. The more frequently the red line flickers, the more it takes advantage of the common assumption that transactions are active.
The Financial Services Commission said, "When the price of a virtual asset with low liquidity rises for no particular reason or when trading volume increases, the price can suddenly plunge, so caution is needed in transactions," and warned, "Anyone who artificially induces buying pressure through high-priced buy orders or otherwise moves prices may be subject to punishment and a penalty surcharge under the Act on the Protection of Virtual Asset Users."