South Korea new law takes action against crypto ‘pump and dump’

South Korea’s First Crypto Manipulation Case: Here’s What Happened

South Korea is cracking down on unfair crypto trading. For the first time, authorities are enforcing the Virtual Asset User Protection Act, passed in July 2024, to tackle market manipulation.

The Pump-and-Dump Scheme

The scheme was straightforward: suspects placed big buy orders to drive up a cryptocurrency’s price. Once the price rose, they dumped their holdings, cashing out in just 10 minutes. This strategy reportedly earned them hundreds of millions of Korean won in a month.

New Law Protects Investors

The Virtual Asset Protection Act ensures crypto platforms (VASPs) report suspicious activities and investigate shady trading patterns. This case is the first major test of how the law can protect investors and clean up the market.

FSC’s Plan to Make Crypto Fair

As crypto trading becomes more popular, the Financial Services Commission (FSC) is stepping up efforts to:

Monitor unusual transactions more effectively.
Encourage crypto platforms to take action against fraud.
Create a transparent, fair trading system for all.

Corporate Crypto Trading and Exchange Challenges

Corporate Accounts: South Korea is exploring whether businesses should be allowed to trade crypto, a step discussed during the latest government meeting on virtual assets.
Upbit: The country’s top exchange faces scrutiny for reportedly violating KYC rules over 500,000 times.
Bithumb: In other news, former Bithumb chair Lee Jung-hoon was acquitted in a 2017 data breach case where $7 million was stolen from users.

Easy Explainers:

Pump-and-Dump: Artificially inflating a coin’s price and selling quickly for profit.
VASPs: Companies that handle crypto transactions and services.
KYC: Rules requiring users to verify their identity when using financial services.