The Financial Supervisory Service warned users after confirming some unfair cases in transactions through application programming interface (API), an automated trading program for virtual assets.
The Financial Supervisory Service (FSS) said on the 13th that cases of abuse were found using APIs, including price rigging of virtual assets, distortion of market conditions, and pulling up asking prices by repeatedly submitting high-priced buy orders, requiring user caution.
An API is an automated trading program that allows users to buy and sell virtual assets under pre-set conditions. The abuse cases of APIs guided by the Financial Supervisory Service (FSS) include: ▲ price rigging by repeatedly placing market buy and sell orders to artificially inflate transactions ▲ creating the appearance of large remaining buy quotes by repeatedly placing and canceling spoofed buy orders ▲ distorting market conditions by repeatedly conducting concerted trades among multiple accounts ▲ pulling prices up to a target sell price by repeatedly submitting high-priced buy orders.
Recently, a user was caught by the Financial Supervisory Service (FSS) for inflating transactions by repeatedly placing small buy and sell orders via API and simultaneously submitting high-priced buy orders to push up prices for profit.
The Financial Supervisory Service (FSS) said that submitting excessive odd-lot trades or high-priced and spoofed buy orders via API may constitute unfair transactions. It urged users to manage risk by frequently monitoring both the pre-set trading conditions and the current market situation in preparation for rapid market changes.
It also said that in situations where virtual asset prices and trading volume surge in the short term due to high-frequency transactions without special reason, chasing trades may lead to losses from a subsequent sharp price drop. It noted that if a key required for API transactions is leaked and illegal activity occurs, there is a possibility of being criminally punished as an accomplice.
Acts such as repeatedly submitting small-quantity virtual asset buy and sell orders, or submitting high-priced orders to induce trading, may constitute price manipulation.
The Financial Supervisory Service (FSS) said, "For API orders with potential for unfair transactions, we will continue to strengthen exchanges' monitoring capabilities by establishing precise market surveillance standards."