South Korea Plans to Introduce AI-Based Virtual Asset Supervision System, Reporting Over 30 Crypto Cases in Two Years to Combat Market Manipulation

Odaily星球日报讯 The Financial Services Commission (FSC) of South Korea today announced the results of its virtual asset market supervision, stating that regulatory authorities have focused on cracking down on short-term manipulation, "pump and dump" schemes, and other activities that disrupt market order. Among the reported cases, price manipulation cases account for the majority. The FSC stated that since the implementation of the "Virtual Asset User Protection Act" two years ago, approximately 40 investigations into unfair trading of virtual assets have been completed, and over 30 cases have been reported or referred to judicial authorities, with the majority involving price manipulation.

In addition, regulators have investigated cases involving short-term manipulation through the borrowing of API keys, price manipulation coordinated by project issuers, and large-scale "whale" manipulation linked to trading on overseas exchanges. Some fraud trading cases involve project teams disseminating false information via social media to attract investor buying, as well as arbitrage manipulation exploiting price correlations between USDT and BTC on exchanges.

To date, South Korean regulatory authorities have referred 25 suspected offenders to judicial authorities, with an average illegal profit of approximately 1.4 billion KRW per case. Among these, there are 8 cases involving illegal profits ranging from 500 million to 5 billion KRW, and 1 case involving profits exceeding 5 billion KRW. Due to the distinct characteristics of short-term manipulation, the virtual assets involved in each case average about 8 different coins.

In terms of recovering illegal proceeds, South Korea's financial regulatory authorities have imposed fines in 2 cases, including 1 fraud trading case and 1 price manipulation case, with fines amounting to 125% to 165% of the illegal profits obtained.

The FSC stated that it will further strengthen market monitoring capabilities by introducing an AI-based virtual asset supervision system, including real-time market monitoring, second-level price manipulation analysis, and automatic identification of suspicious accounts and trading intervals, to enhance early detection of abnormal transactions. Additionally, South Korean regulatory authorities plan to introduce a mechanism for freezing accounts holding illegal proceeds, as well as a reporting and reward system for unfair trading, in future digital asset-related legislation to further improve the regulatory framework for the virtual asset market. (KBS)