South Korean officials examined the first case of bitcoin price manipulation under the Virtual Asset Protection Act, which was introduced in July 2024. The Financial Services Commission (FSC) announced on January 16 that suspects involved in this case had been charged with artificially inflating the price of a cryptocurrency before quickly selling off large quantities, a practice commonly known as a “pump and dump.”
The FSC discovered that the suspect’s manipulation efforts often required less than ten minutes. During this brief period, they put several buy orders to increase the price of a token, giving the impression of tremendous demand. When the price reached its pinnacle, they sold their pre-purchased tokens, profiting by hundreds of millions of Korean won over the course of a month.
This crackdown comes as bitcoin trading volumes in South Korea continue to climb, increasing concerns about market manipulation and unfair competition. The FSC reiterated its commitment to increasing market transparency by strengthening investigation processes and encouraging local virtual asset service providers (VASPs) to monitor and report suspicious activity. The agency also intends to look into structural adjustments to provide a fair trading environment for all investors.
In the meanwhile, South Korean officials are expanding discussions on corporate cryptocurrency investments. This includes a pending decision on punitive measures against Upbit, a major exchange accused of breaking customer verification rules.
With these reforms, South Korea hopes to protect its increasing community of cryptocurrency investors while also encouraging a transparent and fair trading environment.
