South Korean financial regulators have examined more than 40 instances of unfair cryptocurrency trading since the Virtual Asset User Protection Act came into effect in July 2024, according to Financial Services Commission Chair Lee Eog-won.
Authorities have forwarded over 30 cases for further investigation and identified 25 suspects associated with illicit trading activities. The average illegal profit per case was approximately 1.4 billion Korean won, or about $940,000. These figures were revealed as the law reached its two-year milestone.
Market Surveillance and Legal Framework
The Virtual Asset User Protection Act established mandatory protocols for virtual asset service providers. These include requirements to segregate customer funds from company assets and to deposit user funds in banks. The legislation empowers regulators to inspect providers and act against illicit practices such as insider trading, wash trading, and market manipulation.
Recent enforcement efforts have targeted short-term price manipulations and deceptive trading patterns that can destabilize the market. Lee emphasized plans to enhance surveillance and investigative capabilities using artificial intelligence to better monitor high-risk crypto activities.
Earlier this month, the FSC referred two suspected market manipulation cases to prosecutors. One involved a trader accused of purchasing nearly half the circulating supply of a token before selling into a price increase. Warnings were issued regarding sudden price and volume changes in low-liquidity tokens.
The South Korean government continues to expand its regulatory framework for digital assets as part of broader oversight efforts in the crypto sector.
This material is for informational purposes only and does not constitute financial advice.
