Freedom Index
Listen to the article
South Korean regulators are stepping up oversight of the domestic cryptocurrency market, signaling a faster, more coordinated approach to detecting suspicious trading activity amid renewed volatility.
The heightened scrutiny was highlighted after South Korea’s Financial Supervisory Service (FSS) said it was reviewing sharp price movements in the ZKsync token listed on Upbit, following extreme volatility concentrated around a system maintenance window, according to The Korea Economic Daily (Hankyung).
The FSS said it was analyzing data and could escalate the review into a formal investigation, depending on the findings.
FSS officials and legal experts cited by Hankyung described the case as indicative of how regulators now respond to sudden price swings. The focus is less on isolated incidents and more on strengthening systems and clarifying expectations for exchanges operating as critical infrastructure.
Cointelegraph reached out to Upbit operator Dunamu for comments, but did not get a response before publication.
Faster detection and earlier escalation
South Korea’s push to tighten crypto market oversight has been accompanied by recent legislative and surveillance changes.
On Monday, the FSS expanded its use of artificial intelligence to monitor digital asset trading, upgrading its in-house crypto intelligence system to automatically detect potential crypto manipulation across different time frames.
The watchdog said the system reduces reliance on manual investigations and enables earlier detection of suspicious trading windows. Additional planned upgrades include tools to detect coordinated trading networks and trace the origin of funds used in suspected manipulation.
Regulators have also signaled a willingness to intervene faster. On Jan. 6, local media reported that the Financial Services Commission (FSC) was weighing mechanisms to enable pre-emptive freezing of funds to prevent the laundering of illicit proceeds linked to active investigations.
Related: South Korea’s Coinone weighs stake sale amid Coinbase speculation
From surveillance to enforcement
The surveillance push comes as courts begin applying criminal penalties under South Korea’s crypto investor protection laws.
On Wednesday, the Seoul Southern District Court reportedly handed down its first prison sentence under the Virtual Asset User Protection Act, convicting a crypto executive, identified only by the surname Lee, of price manipulation involving a token listed on local exchange Bithumb.
According to Hankyung, the court sentenced the executive to three years in prison, ruling that repeated high-price buying and low-price selling, along with the placement of deceptive buy orders, constituted market manipulation.
Magazine: South Korea gets rich from crypto… North Korea gets weapons
Read the full article here
Fact Checker
Verify the accuracy of this article using AI-powered analysis and real-time sources.