South Korea's Financial Services Commission Proposes Study on Suspending Account Payments for Virtual Assets Suspected of Market Manipulation

Odaily News The South Korean financial authorities are studying the introduction of a "payment suspension" system in cases of virtual asset price manipulation to prevent suspects from transferring or concealing illegal proceeds during the investigation phase. Reports indicate that during a routine meeting last November, the Financial Services Commission discussed relevant cases and proposed referencing practices in the capital market for stock price manipulation. This would involve preemptively freezing accounts suspected of manipulating virtual asset prices, restricting fund outflows such as withdrawals, transfers, and payments.

The report points out that under the current system, the confiscation or recovery of illegal proceeds from virtual assets typically requires prosecutors to conduct an investigation and obtain a court warrant before it can be implemented. This creates a risk that assets may be transferred during this period. Internally, the Financial Services Commission believes that a payment suspension mechanism for accounts, similar to that in the Capital Markets Act, could be considered for introduction in the proposed "second phase of virtual asset legislation" to more effectively prevent the disposal of unrealized gains in advance. Relevant personnel from the financial authorities stated that since virtual assets are more easily concealed once transferred to personal wallets, such a system may help strengthen supervision and asset preservation at an early stage. (NewSIS)