South Korea’s Financial Supervisory Service (FSS) has begun investigating the cryptocurrency exchange Coinone due to significant price fluctuations in the MOVE token.
According to a report from the local news outlet MTN, the investigation seeks to identify any potential cases of unfair trading.
The investigation stems from a dramatic price surge on December 9, when Movement’s token value skyrocketed from 215.3 won (approximately $0.15) to 998,500 won ($697) within minutes on Coinone before crashing back to 5,300 won shortly after. The token, developed on the Movement blockchain using the Move programming language initially designed for Facebook’s Diem project, had its token generation event announced on the same day by the Movement Network Foundation.
The FSS is scrutinizing whether Coinone followed proper protocols during this volatile trading event and is examining the listing process that allowed Movement to debut on the platform earlier than on rival exchanges such as Upbit and Bithumb. This unusual timing has raised questions about Coinone’s vetting procedures.
As part of its broader mandate to regulate financial institutions, the FSS is delving into whether any irregularities occurred during the token’s listing and trading, signalling heightened regulatory oversight in South Korea’s crypto industry.
This heightened regulatory focus comes as South Korea’s crypto market sees significant activity among young investors. According to data from local exchanges Upbit and Bithumb, over 185 South Koreans in their 20s held digital assets valued at over ₩1 billion (approximately $750,000) each as of the end of 2023. This group, forming the third-largest segment of high-value crypto holders, primarily invests in leading cryptocurrencies like Bitcoin. Their total holdings amount to ₩967.2 billion (around $3.91 million per individual on average). The report suggests that many of these young investors likely converted funds received from their parents into cryptocurrencies or achieved success through investments in high-performing altcoins.
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