The financial authorities reported and referred to investigative authorities more than 30 cases of unfair trading, including market manipulation and illegal transactions, and a total of 25 suspects over the two years since the Virtual Asset User Protection Act took effect. The average illicit gain they made by disrupting the market came to 1.4 billion won.
On the 19th, the Financial Services Commission and the Financial Supervisory Service announced "key results of investigations into unfair virtual asset trading during the two years of the Virtual Asset User Protection Act and future plans." Since the law took effect in Jul. 2024, the financial authorities have investigated more than 40 cases of unfair trading and reported or referred more than 30 of them to investigative agencies. A total of 25 suspects were tallied. The average illicit gain per case was about 1.4 billion won.
Representative market-manipulation tactics included "racehorse" and "fish farm." Racehorse is a method of luring investors' buying by placing concentrated orders at a specific time when the rate of price increase resets. Fish farm is a method of artificially pushing up prices on an exchange where virtual asset deposits and withdrawals are temporarily suspended.
Authorities also reported to investigators last year a case in which meme coin (Meme Coin; trendy virtual asset) issuers bought coins in advance, spread false information on social networking services (SNS; Social Networking Service) to draw in investors, then dumped all their holdings to pocket illicit gains worth hundreds of millions of won.
A case in which high-frequency application programming interface (API; Application Programming Interface) transactions and spoofed orders were used to drive up prices to sell foundation-held allocations at high prices was also sent to prosecutors via a fast track (Fast Track; emergency action procedure).
There were eight cases with illicit gains between 500 million won and less than 5 billion won, and one case over 5 billion won. The financial authorities imposed a penalty surcharge equal to 125%–165% of the illicit gains for one illegal transaction case and one market-manipulation case.
Authorities emphasized that they strengthened market surveillance after the Virtual Asset User Protection Act took effect. By establishing a constant abnormal-transaction monitoring system for virtual asset exchanges, digital forensics, and an artificial intelligence (AI; Artificial Intelligence)-based market surveillance framework, they said they improved investigative efficiency by introducing per-second market-manipulation analysis and automatic detection of suspicious intervals.
The financial authorities plan to establish a regulatory framework for the virtual asset market on par with the capital market. They are also reviewing incorporating into the Basic Act on Digital Assets (phase two of the virtual asset law) an account and account payment-freeze system to block concealment of illegal profits and a system for reporting unfair trading and offering rewards.