Whale' manipulating domestic and international virtual asset prices with tens of billions of won... Financial Services Commission reports to prosecution

'Whale' manipulating domestic and international virtual asset prices with tens of billions of won... Financial Services Commission reports to prosecution

Ultra-short-term price manipulation through repeated API market price trading and high-price buying 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 decided at its 12th regular meeting to report suspects in two virtual asset market price manipulation cases to investigative agencies.

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 securing a dominant market position by accumulating up to half of the global circulating supply with a large amount of capital, he artificially created a market situation dominated by buying power, 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 a price increase for the same virtual asset listed on domestic exchanges and encouraging buying by domestic investors.

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

Mr. B is suspected of ultra-short-term price manipulation combining API (Application Program Interface) market price trading and high-price limit orders. He was detected through a special investigation by the Financial Supervisory Service.

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

After attracting buying interest, he was confirmed to have sold his holdings in portions to realize profits.

The Financial Services Commission warned, "Investors should refrain from chasing virtual assets whose prices and trading volumes surge without reasonable cause," adding, "Damage from 'Pump and Dump' schemes, where 'whale' investors concentrate their buying to raise prices and then sell off all at once to realize profits, can be even greater."

Financial authorities plan to improve market alerts, such as concentrated trading by a few accounts, to strengthen the provision of information on 'whale' investors' virtual asset accumulation and disposal.

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