South Korea FSC Cracks Down on Crypto Whales and Kimchi Coin Manipulation

The South Korean Financial Services Commission (FSC) has sent two suspected crypto market manipulation cases to prosecutors, expanding action against unfair trading. The referrals involve alleged price control, artificial demand, and tactics that regulators said exposed retail investors to serious market losses.

The first case deals with a significant crypto investor, known as a whale, who allegedly used large amounts of money over two months to influence the price of one token on local and foreign stock exchanges. The person bought almost half of the token's global circulating supply, using tens of billions of Korean won. This strategy allowed them to gain great influence on the market and create artificial buying pressure.

According to regulators, the suspect raised the price of tokens on foreign exchanges, which influenced the same tokens on South Korean stock exchanges. This move attracted investors from the country who joined the transactions due to the increasing price of the token. The regulatory agency said that the person has experienced losses on foreign stock exchanges but made larger gains in South Korea, resulting in losses for Korean investors.

The second case involves a kimchi coin with low liquidity. Regulators accused the suspect of placing repeated small market orders on buying and selling through API channels, generating misleading signs of trading activity. The person allegedly made limited buy orders at inflated prices via web channel, which pushed up the price and attracted buyers. They then sold the token in portions to profit from the increased price.