South Korea’s top financial regulator said it will crack down on market manipulation, after finding that automated trading now accounts for 30% of the country's cryptocurrency turnover.
“Some traders are using automated tools to inflate volumes and manipulate prices,” the Financial Supervisory Service (FSS) said in a statement reported by local media on Monday. The regulator warned of targeted investigations into accounts with abnormal trading patterns.
The FSS detailed several manipulation tactics, including the use of high-frequency, small-value orders to create a false impression of market activity. In one case, a trader used API-driven orders of just 5,000 to 10,000 won ($3 to $6) to generate fake volume before selling into the artificially inflated price. Another method involved repeatedly placing higher-priced buy orders to systematically drive an asset's price toward a predetermined target.
The move signals a significant escalation in regulatory oversight as South Korea pushes to curb market abuse ahead of a comprehensive legal framework. The warning follows recent FSS orders for exchanges to reconcile asset holdings every five minutes and a Financial Services Commission (FSC) initiative to tighten withdrawal rules to combat fraud. These enforcement efforts have been complicated by legal challenges, including a recent court decision to overturn a partial suspension of the country's largest exchange, Upbit, highlighting existing gaps in the regulatory structure.
This article is for informational purposes only and does not constitute investment advice.
