Over 40 Cases of Crypto Market Manipulation Uncovered in South Korea

South Korea Flags Over 40 Crypto Manipulation Cases

South Korean financial authorities have identified more than 40 cases of unfair crypto trading since the enactment of the Virtual Asset User Protection Act in July 2024. Lee Eog-won, Chair of the Financial Services Commission (FSC), announced that investigations have led to a referral of over 30 cases for further scrutiny and the identification of 25 suspects involved in these cases.

Average Unlawful Gains Identified

The investigations revealed that the average unlawful gains per case were approximately 1.4 billion Korean won, equivalent to about $940,000. These findings were shared as the law celebrated its second anniversary on July 19, 2026.

New Era of Regulation

According to Lee, the Virtual Asset User Protection Act has successfully integrated the crypto market into a formal legal framework designed to protect users. The law mandates that virtual asset service providers separate customer funds from company assets and manage user deposits through banks.

Enhanced Regulatory Efforts

As part of ongoing regulatory efforts, authorities have been utilizing their powers to combat various malpractices, including insider trading, wash trading, and market manipulation. Recent actions taken by the FSC include referring two suspected manipulation cases to prosecutors, one of which involved a trader accused of buying a significant portion of a token’s circulating supply.

The Role of AI in Surveillance

Looking ahead, the FSC plans to implement stronger AI-based surveillance systems to oversee high-risk activities in the crypto market. Regulator Lee emphasized the commitment to enhancing monitoring and investigation capabilities to better protect users and maintain market integrity.

Expanding Scope of Regulations

In conjunction with these actions, South Korea is actively broadening its regulatory framework. The government aims to extend asset management rules to encompass cryptocurrencies and other digital assets beyond traditional holdings like real estate. The FSC has also flagged approximately 40 unregistered crypto operators to law enforcement, raising awareness about the risks posed by platforms operating outside of the country’s registration requirements.

The two-year mark of the Virtual Asset User Protection Act highlights the government’s proactive stance in regulating the cryptocurrency landscape amid growing concerns over market integrity and user safety.