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Authorities "Refrain from chasing unusually soaring stocks"…Urges caution against lending API keys to others
A suspect who borrowed Application Programming Interface (API) keys that enable automated orders under pre-set conditions in the virtual asset market and misused them for market manipulation crimes has been transferred to the prosecution.
On the 29th, the Financial Services Commission held its 8th regular meeting and resolved to notify the prosecution of a total of two virtual asset market manipulation cases, including this one.
Suspect A borrowed API keys from multiple virtual asset exchange accounts for a certain fee and sequentially placed high-priced buy orders between accounts to drive up the price.
Then, through repeated wash trading, they made it appear as if trading was active, and when general investors' buying interest came in, they sold most of their holdings to secure trading profits.
Suspect B selected a specific virtual asset for market manipulation, actively pre-purchased tens of millions of won worth of the asset, and then concentrated manipulative orders in a short period to induce a price increase. Subsequently, they defended against price drops with fictitious buy orders and sold, obtaining tens of millions of won in illicit profits.
The Financial Services Commission warned, "If one's API key lent to others is used for unfair trading or money laundering, the owner may be held civilly and criminally liable as an accomplice." It also emphasized that investors should refrain from chasing a particular asset if its price and trading volume surge without reasonable cause.
Authorities plan to strengthen the user order information collection and management system by making IP registration mandatory when issuing API keys and allowing API service access only through registered IPs. A system will also be established to identify high-risk accounts with a high possibility of improper API key lending.
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