Korea Cracks Down on Whale Investors: $10s of Billions in Alleged Manipulation

South Korea's financial watchdog has sent a strong message to crypto market manipulators: it's watching and will take action. The Financial Services Commission (FSC) referred two cases of alleged cryptocurrency market manipulation to prosecutors, marking one of the most aggressive enforcement actions under the country's Virtual Asset User Protection Act (VAUPA). One case involves a 'whale' investor accused of cornering up to 50% of the global supply of a specific crypto asset.

The whale allegedly poured tens of billions of won into the asset over two months, amassing a controlling position and using 'linkage strategies' across domestic and international exchanges to artificially inflate prices in Korean markets. The FSC says this scheme resulted in substantial profits for the whale at the expense of everyday Korean investors.

The second case involved sophisticated short-term manipulation of 'kimchi coins,' with alleged manipulators using API-driven market orders and high-price limit buys on online channels to pump prices before executing coordinated sell-offs.