▲ Financial Services Commission
The Financial Services Commission and the Financial Supervisory Service announced today (September 23) that they have resolved to file complaints with or notify investigative agencies regarding suspects involved in unfair trading practices in the virtual asset market during a regular meeting.
The cases involve four instances, comprising three cases of ultra-short-term market manipulation and one case of unfair trading and market manipulation by executives and employees of a virtual asset operator.
Among them, two cases involve brothers, identified as A and B, who were caught engaging in ultra-short-term market manipulation for multiple virtual assets using identical methods, and have been referred to investigative agencies.
They rapidly accumulated volume and then used automated trading programs (APIs) to repeatedly place market-buy and market-sell orders for identical quantities with small amounts to lure buying interest, while driving up prices through high-priced limit-buy orders.
They subsequently realized ill-gotten gains by selling their entire holdings once their target prices were reached.
Another individual, C, was referred for filing a complaint on charges of manipulating market prices by even mobilizing accounts under other people's names.
It was found that C pre-purchased large amounts of tokens that experienced high volatility just before market manipulation and propelled prices using high-priced limit-buy orders in their own account.
In addition, to bypass the virtual asset exchange's limits on the number of API orders, C repeatedly executed high-frequency, small-amount market API trades using accounts under other people's names to induce trading activity.
During this process, C disposed of holdings and gained unfair profits by submitting sell orders at high prices in advance, gradually raising prices so that existing sell orders were sequentially executed.
In another case, an incident where executives and employees of a virtual asset operator inflated trading volumes through wash trading to list tokens on a major exchange was referred to investigative agencies.
After attempting multiple times to list the virtual assets they issued and operated on a major domestic virtual asset exchange, but failing due to reasons such as insufficient trading volume, they first listed them on a mid-sized exchange where listing is relatively easier, and artificially met maintenance requirements by inflating trading volumes through wash trading.
To make it appear as though active trading was taking place on the exchange, they hired professional traders and mobilized proxy accounts under the names of executives and employees to trade volumes back and forth between accounts, thereby manipulating trading volumes.
The trading volume inflated through this method accounted for more than 90 percent of the total trading volume, which was used to attract investors and also utilized as a qualification requirement for listing on a major exchange.
This virtual asset issuing foundation was merely a paper company established in a tax haven, and the actual issuance and operation were handled by a domestic corporation established by the suspects.
Major figures related to the foundation listed in the white paper were also confirmed to be non-existent or fictitious persons.
The FSC warned, "Investors need to exercise caution because if the trading volume and price of a virtual asset with otherwise low trading activity surge without reason, or if trading volume is concentrated only on a specific exchange, artificial trading may be involved."
It added, "Moving forward, the financial authorities plan to strengthen monitoring of abnormal trading activities, such as trading patterns similar to those in this measure, and firmly respond to any discovered unfair trading practices to establish a sound order in the virtual asset market."
(Photo: Provided by Financial Services Commission, Yonhap News)
※
Copying, redistribution, and unauthorized use in AI training are strictly prohibited.