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

Odaily Planet Daily reports that the Financial Services Commission (FSC) of South Korea announced today the results of its virtual asset market regulation, stating that regulatory authorities are focusing on combating behaviors that disrupt market order, such as short-term manipulation and "pump and dump" schemes. Among the reported cases, price manipulation cases account for the majority. The FSC indicated 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, with over 30 cases reported to judicial authorities, most of which involve price manipulation.

In addition, regulatory agencies have cracked down on cases involving short-term manipulation through borrowed API keys, project issuers colluding to manipulate prices, and large "whale" manipulations using overseas exchanges for coordinated trading. Some fraudulent trading cases involve project parties spreading false information on social media to attract investors, as well as arbitrage manipulation using the price linkage between USDT and BTC in exchanges.

So far, South Korean regulatory authorities have handed over 25 individuals suspected of illegal activities to judicial authorities, with an average illegal profit of about 1.4 billion KRW per case. Among these, there are 8 cases involving illegal gains between 500 million and 5 billion KRW, and 1 case exceeding 5 billion KRW. Due to the distinct characteristics of short-term manipulation, the average number of virtual assets involved in each case is about 8.

In terms of recovering illegal profits, South Korean financial regulators have imposed fines on 2 cases, including 1 fraudulent trading case and 1 price manipulation case, with fines reaching 125% to 165% of the illegal profits.

The Financial Services Commission of South Korea stated that it will further strengthen market monitoring capabilities by introducing an AI-based virtual asset regulatory system, which will include real-time market monitoring, second-level price manipulation analysis, and automatic identification of suspicious accounts and trading intervals, to enhance early detection of abnormal trading. Additionally, South Korean regulatory authorities plan to introduce a mechanism for freezing accounts of illegal profits and a reporting and reward system for unfair trading in future legislation related to digital assets, further improving the regulatory framework for the virtual asset market.

Disclaimer: This content is provided for general branding and informational purposes only and doesn't constitute financial, investment, legal, or tax advice. Any events, rewards, online events, or related information mentioned herein should not be considered a recommendation, solicitation, or invitation to purchase, sell, trade, or otherwise deal in any crypto assets or to use any services. Crypto assets are highly volatile and may result in loss. WEEX services and online events may not be available in all regions and are subject to applicable laws, regulations, and eligibility requirements. You are responsible for ensuring that your use of WEEX services complies with local laws and for carefully assessing the risks before participating in any crypto-related activities.