Financial Services Commission Reports 'Whale' Who Manipulated Domestic and International Virtual Asset Prices with Tens of Billions of Won to Prosecution

Financial Services Commission Reports 'Whale' Who Manipulated Domestic and International Virtual Asset Prices with Tens of Billions of Won to Prosecution

Ultra-short-term price manipulation through repeated API market orders and high-price purchases also reported

An investor, dubbed a 'whale,' who manipulated prices by linking domestic and international exchanges, has been reported to the prosecution.

On the 1st, the Financial Services Commission (FSC) decided at its 12th regular meeting to report two virtual asset market price manipulation cases to investigative agencies for prosecution.

Mr. A is suspected of manipulating the prices of virtual assets listed on multiple domestic and international exchanges for about two months by injecting tens of billions of won.

After accumulating up to half of the global circulating supply with a large amount of capital to secure a dominant market position, he artificially created a market situation with strong buying pressure, thereby influencing prices.

In particular, it was investigated that he used the price linkage structure between multiple exchanges to first raise prices on overseas exchanges, thereby inducing price increases for the same virtual assets listed on domestic exchanges and encouraging purchases by domestic investors.

While Mr. A incurred losses on overseas exchanges, he realized profits exceeding those losses on domestic exchanges, with the damage concentrated on domestic investors.

Mr. B is suspected of ultra-short-term price manipulation by combining API (Application Programming Interface) market orders with high-price limit orders. He was uncovered through a planned investigation by the Financial Supervisory Service.

Mr. B pre-purchased so-called 'Kimchi Coins,' then repeatedly placed market buy and market sell orders through API channels, and repeatedly placed high-price buy orders (above 10th ask price) on web channels to drive up the price.

It was later confirmed that as buying interest was induced, he sold his holdings in batches to realize profits.

The FSC warned, "Investors should refrain from blindly buying virtual assets whose prices and trading volumes surge without reasonable cause," adding, "The damage from 'Pump and Dump' schemes, where 'whale' investors accumulate large volumes, drive up prices, and then sell all at once to realize profits, can be even greater."

Financial authorities plan to improve market warnings, such as focusing on transactions by a small number of accounts, to enhance the provision of information on the accumulation and disposal of virtual assets by 'whale' investors.

Furthermore, they plan to enhance the unfair trading system to detect and strictly penalize unfair trading in the virtual asset market, including price manipulation by whale investors.