South Korea’s financial regulator has referred two individuals to prosecutors over separate alleged cryptocurrency market manipulation schemes, stepping up enforcement against unfair trading in the digital asset sector.
The decision was approved by the Financial Services Commission (FSC) during its 12th regular meeting on Wednesday. The cases involve alleged price manipulation tactics that the regulator says caused losses for retail investors while generating profits for the suspects.
#금융위원회 는 #가상자산시장시세조종 사건(2건) 혐의자에 대해 수사기관 고발 조치를 의결하였습니다.
✅대규모 자금을 동원하여 국내·외 거래소를 연계하여 시세조종
✅시장가 매매와 지정가 고가매수를 결합하여 매매를 유인한 초단기 시세조종https://t.co/uO7clTb5MU pic.twitter.com/MJKyoNwBE2— 금융위원회 (@fsckorea) July 1, 2026
The FSC also said it will build its monitoring systems to detect suspicious trading activity earlier and improve investigations into unfair practices in the crypto market.
Crypto whale accused of orchestrating pump-and-dump scheme
In the first case, the FSC alleges that a crypto whale manipulated the price of a digital asset listed on both South Korean and overseas exchanges over a period of about two months.
According to the regulator, the suspect used tens of billions of Korean won to accumulate nearly half of the token’s circulating supply, giving them significant control over the market.
The whale allegedly pushed the token’s price higher on overseas exchanges before drawing domestic investors into buying the asset. After prices climbed, the suspect reportedly sold off the holdings, triggering losses for retail investors as the token’s value fell.
How did the second suspect manipulate the market?
The second case centres on an individual accused of creating false trading activity through automated API channels.
The FSC said the suspect repeatedly placed small market buy and sell orders to make the token appear actively traded. At the same time, high-priced limit buy orders were submitted through a web trading channel to push the market price higher.
Once other investors entered the market, the suspect allegedly sold the holdings in stages to lock in profits.
Meanwhile, South Korea is looking at stricter reporting requirements for cryptocurrency transfers, with regulators proposing that Anti-Money Laundering (AML) obligations be expanded to cover smaller transactions.
FSC plans stronger oversight of crypto trading
Alongside the referrals, the FSC warned investors against buying cryptocurrencies that experience sudden spikes in price or trading volume without a clear reason.
The regulator said pump-and-dump schemes often rely on restricting available supply to drive prices higher before large holders rapidly sell their positions, causing prices to collapse.
To address such activity, the FSC plans to improve its warning system for highly concentrated trading and strengthen its investigative framework to identify suspected market manipulation more quickly. Earlier this year, South Korea approved changes to its crypto licensing framework, raising the bar for companies seeking to operate in the country and giving regulators broader powers to scrutinize ownership, governance and risk controls across the digital asset sector.
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