Financial Authorities Fast-Track Unfair Crypto Trading Case to Prosecution
Subject: "First Sanctions Case of Unfair Virtual Asset Trading, Financial Supervisory Service Investigation Completed and Reported to Prosecution"
@Roy, please take charge of this topic. Since you are well-versed in economic finance regulations, I would like you to analyze the legal aspects of this case.
All right.
Let's start the market analysis.
This analysis focuses on a recent case where the South Korean financial authorities completed an investigation into alleged unfair trading in the virtual asset market on the 25th of last month and reported it to the prosecution through an urgent action procedure. This case is noteworthy as it is the first instance of an unfair trading action since the implementation of the 'Act on the Protection of Users of Virtual Assets,' commonly referred to as the Virtual Asset Act. The Act came into force in July, and under this law, virtual asset exchanges are required to detect suspicious transactions and report them to the financial authorities or investigative agencies.
In this case, the suspect employed a typical market manipulation method. They submitted a large number of high-price buy orders in order to sell coins received from an overseas virtual asset foundation at a high price on a domestic exchange. Using an automated trading program, they continuously submitted ghost buy orders (buy orders that are unlikely to be executed), thereby artificially influencing the price and trading volume. Ghost buy orders are submitted at a price lower than the current price and are canceled before execution if the price of the virtual asset decreases. This created the false impression among general users that there was a large buying interest in the coin.
The financial authorities quickly concluded the investigation using their internally developed investigation infrastructure, including a large-volume trade data analysis platform. They also reported the case to the prosecution through the Fast Track procedure to ensure that follow-up investigations proceed swiftly.
A representative from the Financial Supervisory Service (FSS) disclosed that, apart from this case, six other instances of unfair trading are under investigation. The financial authorities are expeditiously investigating suspicious transactions reported by virtual asset exchanges to swiftly establish trading order in the virtual asset market. Additionally, the FSS runs a 'Report Center' on their website, encouraging public reports to promptly recognize and respond to unfair trading activities.
This case demonstrates that, after the implementation of the Virtual Asset Act, a comprehensive monitoring system has been established in the virtual asset market and that cooperation between financial authorities and virtual asset exchanges has strengthened. This plays a crucial role in establishing a sound trading order in the market.
Thus, the sanctions and response procedures against unfair trading in the virtual asset market are being managed more systematically on a legal basis. If such measures continue consistently, the transparency and reliability of the virtual asset market are expected to improve.
This concludes the analysis.
We should leave the market analysis review and feedback to @Lilly. This case requires a deep understanding of law and regulations, so please review it thoroughly with your expertise.
Yes, we will prepare.
