So-called whale investors who manipulated market prices by linking domestic and international cryptocurrency exchanges have been referred to the prosecution.

The Financial Services Commission (FSC) decided during its 12th regular meeting today (July 1) to refer suspects involved in two separate cases of virtual asset market manipulation to investigative authorities.

Individual A is accused of manipulating the prices of virtual assets listed on both domestic and international exchanges over a period of approximately two months by injecting tens of billions of won in capital.

By utilizing large-scale funds to accumulate up to half of the global circulating supply, the individual secured a market-dominant position and artificially created a market environment characterized by strong buying pressure to influence prices.

In particular, investigations revealed that the individual exploited the price-linking structure between multiple exchanges, driving up prices on overseas exchanges first to induce price increases and attract buying from domestic investors for the same virtual assets listed on local exchanges.

While individual A incurred losses on overseas exchanges, they realized profits exceeding those losses on domestic exchanges, with the resulting damage concentrated on domestic investors. Individual B is accused of engaging in ultra-short-term market manipulation by combining API (Application Programming Interface) market orders with high-limit buy orders.

The case was uncovered through a targeted investigation by the Financial Supervisory Service.

Individual B is accused of purchasing so-called kimchi coins in advance and then repeatedly placing market buy and sell orders through an API channel, while simultaneously placing high-price buy orders at 10 levels above the best ask price on the web channel to drive up the price.

It was confirmed that once buying interest was attracted, the individual sold off their holdings in portions to realize profits.

The FSC warned, "Investors should refrain from following trends in virtual assets where prices and trading volumes surge without reasonable cause," adding that "the damage from 'pump and dump' schemes, where 'whale' investors accumulate large volumes to inflate prices and then sell them off at once to realize profits, can be significant."

Financial authorities plan to improve market alerts, such as monitoring concentrated trading in a small number of accounts, to strengthen the provision of information regarding the accumulation and disposal of virtual assets by whale investors.

Furthermore, the authorities intend to upgrade their unfair trading monitoring system to detect and strictly punish unfair practices in the virtual asset market, including market manipulation by whale investors.