South Korea’s financial authorities have investigated more than 40 cases of unfair trading, including market manipulation and fraudulent cryptocurrency trading, over the past two years.
According to X post by Financial Services Commission Chairman Lee Eog-won, 30 of them reported or referred to investigative agencies, identifying 25 suspects since the Virtual Assets User Protection Act came into force in July 2024.
Lee said the average illegal profits were about 1.4 billion Korean won ($940,000).
“Today is the second anniversary of the adoption of the “Act on the Protection of Users of Virtual Resources…”. This was a significant time that brought the virtual asset market, which was then outside the institutional framework, into the legal framework and created an opportunity to establish a system to protect users of virtual assets,” Lee said.
Related: South Korea has brought digital assets under its new state asset management system
The Act on the Protection of Users of Virtual Resources is designed to protect users who purchase and hold crypto assets with virtual asset service providers.
VASPs are legally required to segregate user deposits and virtual assets from their own corporate resources by keeping customer deposits in banks.
The legislation also addresses illegal activities such as insider trading, illegal trading and market manipulation, strengthening the powers of the Financial Services Commission (FSC) to supervise and control VASPs.
“We will continue to improve AI-based market surveillance and monitoring investigation systems and proactively respond to high-risk areas,” Lee added.
