South Korea Cracks Down on Crypto Whales Amid Tokenization Push

South Korea's financial authorities have cracked down on suspected crypto market manipulators by referring two cases to prosecutors. The Financial Services Commission (FSC) approved the referrals during its 12th regular meeting held on July 1, citing suspected violations linked to unfair virtual asset trading practices.

The first case involves a 'crypto whale' accused of executing a large-scale pump-and-dump strategy across domestic and overseas exchanges. The suspect allegedly accumulated nearly half of the token's circulating supply before creating artificial buying pressure through coordinated trading activity.

The FSC warned investors to remain cautious when tokens experience unexplained price increases or unusually high trading volumes, while regulators announced plans to strengthen market surveillance systems and improve the detection of suspicious trading patterns.

Meanwhile, the Bank of Korea is advancing blockchain-based financial infrastructure through Project Hangang. Governor Shin Hyun-song presented the project's progress during the European Central Bank's Sintra Forum in Portugal, showcasing the unified ledger's ability to operate reliably under real-world conditions.

The central bank plans to issue tokenized government bonds as its next major initiative, aiming to strengthen monetary policy while supporting financial stability and improving operational efficiency. The second phase of Project Hangang will begin during the second half of 2026, expanding digital currency applications into government spending programs.