South Korea’s Financial Services Commission (FSC) said on July 20 that more than 30 crypto unfair-trading cases have been referred to prosecutors over the past two years, with 25 people charged since the Virtual Asset User Protection Act took effect on July 19, 2024.
In its two-year enforcement review and legislative roadmap, the FSC said the average illegal profit per case was about 1.4 billion won, or roughly $1 million. The regulator identified price manipulation and trading induced by false social media posts as the main forms of misconduct found during that period.
Two-year enforcement record
According to the FSC, the enforcement framework built under the Virtual Asset User Protection Act has produced the following results since the law came into force on July 19, 2024:
- More than 30 crypto unfair-trading cases referred to prosecutors
- 25 people charged
- Average illegal gains of about 1.4 billion won per case, or about $1 million
The FSC said the main violations were price manipulation and trading inducement through fake social media content.
Manipulation patterns cited by the regulator
The commission said one of the main tactics identified in the cases was the so-called “gyeongjuma” style of sequential pump operations. It also pointed to time-based manipulation, where prices were pushed up in concentrated trading during specific windows.
Another set of cases involved false information posted on social media to lure retail investors into trades.
AI-based monitoring upgrade
The FSC also said it has upgraded its market surveillance system. The changes include AI-enhanced modules added to real-time monitoring, second-level precision in transaction analysis, and automated detection of suspicious abnormal activity to reduce delays from manual intervention.
Phase 2 of the Digital Asset Act
The regulator said the second phase of the Digital Asset Act will add two enforcement tools.
- Account-freeze authority: The FSC would be empowered to immediately freeze accounts tied to suspected illegal trading in order to prevent illicit gains from being concealed or moved.
- Whistleblower reward system: The plan would create protection and incentive mechanisms for internal informants to help uncover violations earlier.
The FSC said these measures are intended to address increasingly sophisticated cross-border manipulation tactics and rebuild market trust on the basis of investor protection.
ABMedia noted that it has previously tracked other areas of South Korea’s crypto policy, including the second phase of the Hangang CBDC project, tokenized securities rules, and the government’s three-pronged strategy for the second half of the year.