Korea Cracks Down on Crypto Whales with Pump-and-Dump Cases Referred to Prosecutors

South Korea's Financial Services Commission (FSC) has referred two crypto market manipulation cases to prosecutors, marking the latest effort in the country's growing focus on regulating virtual assets.

The first case involves a suspect accused of using tens of billions of Korean won over about two months to influence a token listed on domestic and overseas exchanges. The FSC said the suspect allegedly accumulated nearly half of the token's global circulating supply, giving them strong control over available market supply.

According to the regulator, the suspect pushed up the token price on overseas exchanges and then attracted buying from domestic investors before selling holdings on South Korean exchanges, causing losses for retail traders. The FSC warned that this type of pump-and-dump scheme can lead to a sharp price fall once the large holder exits.