South Korean financial authorities are preparing tougher measures against unfair trading in digital assets, including a possible system to freeze accounts and a reward program for people who report suspected misconduct. The proposals are being considered as part of the second phase of the country’s Digital Asset Act and are intended to stop illicit profits from being hidden while reinforcing confidence in the market.
Enforcement Record Since User Protection Act
The push follows a series of investigations since the Virtual Asset User Protection Act took effect. Authorities said they have examined more than 40 cases of unfair virtual-asset trading, referred or reported more than 30 of them to investigative agencies, and identified 25 suspects.
According to the authorities, price manipulation made up the bulk of the cases. Reported tactics included ultra-short-term “racehorse” trading and so-called “corral” schemes tied to periods when deposits and withdrawals were suspended. Investigators also found examples involving the misuse of API keys to influence prices, large investors mobilizing funds to move markets, and interventions through overseas exchanges.
Patterns of Abuse and Illicit Gains
Authorities said one case involved memecoin issuers who allegedly bought tokens in advance, spread false information to attract buyers, and then sold into the rally. The reported illicit profit in that case ran to hundreds of millions of won.
Some investigations also uncovered schemes exploiting price linkage between Tether and Bitcoin. Across the cases reviewed, the average illicit gain was about 1.4 billion won, or roughly $1 million. Eight cases produced gains ranging from 500 million won to 5 billion won, while one case exceeded 5 billion won. On average, each case involved eight digital assets.
Officials have already used financial penalties in some matters. In two cases, surcharges equivalent to 125% to 165% of illicit gains were imposed in an effort to recover profits tied to the alleged misconduct.
Monitoring and Proposed New Tools
At the surveillance level, regulators said they have strengthened oversight through real-time market monitoring, AI-based detection of suspicious trading activity, and second-by-second analysis aimed at spotting price manipulation. Exchanges have also introduced round-the-clock monitoring and preventive controls, according to the authorities.
The new measures under consideration would expand the enforcement toolkit. The proposed account-freeze regime would be modeled on the framework used in South Korea’s capital markets, while the reporting system would include rewards for tipsters in an effort to uncover misconduct earlier.
Second Phase of Digital Asset Act
The planned steps reflect concern that unfair trading in crypto markets is becoming more sophisticated. By adding stronger investigative and preventive tools, authorities say they want to build a fairer and more transparent market environment that users can trust.
The proposals remain part of the government’s broader work on the second phase of the Digital Asset Act. What is already clear from the recent enforcement record is that regulators are treating market abuse in virtual assets as an active and expanding area of supervision, with manipulation cases, cross-market tactics, and large illicit-gain estimates shaping the next stage of policy.
Source: en.bloomingbit.io