South Korea's financial authorities have launched a crackdown on crypto market manipulation under new legislation. The Act on the Protection of Virtual Asset Users, which took effect on July 1, 2024, explicitly bans unfair trading practices, including market manipulation, wash trading, and coordinated price pumping schemes.
The law mandates that virtual asset service providers hold substantial portions of customer assets in cold storage and operate through real-name verified bank accounts. This move is aimed at eliminating the anonymized banking workarounds that previously let shadier operations function in a legal gray zone.
The Financial Services Commission has deployed automated detection systems to flag market anomalies in real-time, with 30 suspected cases referred to prosecutors so far. The government is also considering preemptive account freezing for suspected manipulators without requiring a standard warrant in certain situations.