South Korea FSC refers two crypto market manipulation cases to prosecutors
The cases involve a cross-exchange whale strategy and a Korea-issued kimchi coin scheme that allegedly used rapid API orders and inflated bids to draw in retail buyers.
South Korea’s Financial Services Commission said on July 1 it referred two cryptocurrency market manipulation cases to prosecutors, adding detail to its crackdown on trading practices that can distort prices and harm retail investors. In one case, an investor allegedly spent tens of billions of won over roughly two months to accumulate nearly half of a token’s global circulating supply, then pushed its price higher on overseas exchanges so arbitrage and automated price-linking lifted domestic prices as well. The FSC said losses incurred abroad were outweighed by profits on Korean platforms. In the second case, a trader allegedly targeted a low-liquidity Korea-issued “kimchi coin” by building a position in advance, using API access to place multiple market buy and sell orders within a single second, and entering buy orders at prices more than ten times above the lowest ask to create the appearance of strong demand before selling into the rally. The regulator warned investors against chasing unexplained spikes in price and volume and said it plans stronger alerts on trading concentrated in a small number of accounts, along with expanded disclosure around large-scale accumulation and disposal by whale investors.
- kimchi coin: A token issued by Korean projects that trades largely on domestic exchanges and can be more vulnerable to manipulation in thin markets.
- whale investors: Large holders whose positions and trades are big enough to influence market prices and trading activity.
- API access: A system connection that lets traders place orders automatically and at high speed rather than manually through a website.