South Korea FSC has sent two suspected crypto market manipulation cases to prosecutors as it expands action against unfair trading. The referrals involve alleged price control, artificial demand, and tactics that regulators said exposed retail investors to serious market losses.
The Financial Services Commission (FSC) approved the referrals at its 12th regular meeting on July 1. The cases focus on separate trading schemes in the virtual asset market. Regulators said both cases involved conduct that distorted token prices and misled investors.
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South Korea FSC Says Whale Created Artificial Buying Pressure
The first case deals with a significant crypto investor, known as a whale. South Korea FSC said that the person managed to use big amounts of money during two months to influence one token. This token was present on the local and foreign stock exchanges.
The regulatory agency said that the person managed to buy almost half of the token’s global circulating supply. The purchases involved tens of billions of Korean won. According to the authorities, the position allowed gaining great influence on the market and creating artificial buying pressure.
Firstly, the suspect raised the price of tokens on the foreign exchanges, and this move influenced the same tokens on the South Korean stock exchanges. This strategy attracted investors from the country who joined the transactions because of the increasing price of the token.
The South Korea FSC said that the person has experienced losses on foreign stock exchanges, but he made larger gains in South Korea. The regulatory agency also said that losses were experienced by the Korean investors.
Kimchi Coin Case Involves API Orders and False Trading Signals
The other case was in connection with what regulators described as a kimchi coin with less liquidity. The regulator accused the suspect of placing repeated small market orders on buying and selling through the use of API channels, which generated misleading signs of trading activity.
Additionally, the suspect allegedly made limited buy orders at inflated prices via web channel, which the South Korea FSC noted pushed up the price and attracted buyers. Thereafter, the suspect allegedly sold the token in portions in order to profit from the increased price.
“Investors should refrain from chasing virtual assets whose prices and trading volumes surge without any reasonable cause,” FSC said.
According to the regulator, small-cap tokens can move rapidly when order books are thin. They said a few accounts, which create false signs of trading activity. Such cases can cause loss to ordinary traders once prices fall following the disappearance of false demand.
These referrals follow previous regulatory crackdowns against market manipulation in South Korea’s crypto market.
Two suspects were arrested in January 2025 in connection to price manipulation on Bithumb. South Korea’s FSC will increase disclosure for influencers, strengthen account warnings, and investigate techniques against manipulative trades.
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