South Korea reports first crypto ‘pump and dump’ case under new law
South Korean financial authorities have initiated actions against unfair cryptocurrency trading practices under the Virtual Asset User Protection Act, effective July 2024. The Financial Services Commission (FSC) reported the first case involving price manipulation, where suspects allegedly inflated cryptocurrency prices through rapid buy orders before selling large amounts, earning hundreds of millions of Korean won. This "pump and dump" scheme was executed within 10 minutes, causing sharp price fluctuations. The FSC plans to enhance investigation systems and promote monitoring by virtual asset service providers (VASPs) to ensure market transparency. Additionally, discussions are ongoing regarding corporate crypto trading accounts, and punitive measures for Upbit are anticipated due to potential Know Your Customer violations. A court case involving Lee Jung-hoon, former chair of Bithumb, concluded with his acquittal related to a 2017 data breach affecting 31,000 accounts.
