South Korea's financial regulator has investigated 40 cases of cryptocurrency market manipulation over the past two years, Financial Services Commission Chair Lee Eog-won said Monday. The announcement came on the second anniversary of the Virtual Asset User Protection Act, the country's first comprehensive law targeting digital asset misconduct.
Two years of the Virtual Asset User Protection Act
The act took effect in July 2024, giving the FSC and other agencies new powers to police crypto exchanges and punish unfair trading. Before the law, enforcement was patchy — regulators relied on general financial statutes that didn't always fit digital assets. The anniversary statement from Lee offered a rare public tally of the law's impact.
“The FSC has been working closely with prosecutors and the Korea Financial Intelligence Unit to track down manipulative activity,” Lee said in a prepared statement. He did not provide a breakdown of the 40 cases or name any specific exchanges or individuals under investigation.
What the cases cover
The 40 cases span a range of alleged violations, including pump-and-dump schemes, wash trading, and insider trading. The FSC hasn't released detailed case outcomes, but the number suggests active enforcement. For context, the regulator previously disclosed a handful of high-profile probes — this is the first time it has given a cumulative figure.
South Korea's crypto market is one of the world's largest by trading volume, and local exchanges have faced repeated scrutiny over price manipulation and conflicts of interest. The act requires exchanges to register with the FSC, maintain real-time monitoring systems, and report suspicious transactions.
Regulatory momentum
The two-year mark comes as South Korea's government signals it wants to tighten rules further. In June, the FSC proposed amendments to the act that would impose stricter listing standards and harsher penalties for manipulators. Those changes are still in the legislative pipeline.
Lee's statement didn't mention new policy moves, but the timing — the anniversary itself — was clearly chosen to remind the industry that enforcement isn't letting up. “We will continue to investigate and punish any behavior that undermines market integrity,” he said.
The FSC hasn't set a deadline for concluding the remaining open cases. Some may lead to criminal referrals; others could result in fines or exchange suspensions. The regulator also hasn't said whether it will publish a detailed report on the two-year enforcement record.
For now, the 40-case figure stands as the most concrete measure of how the Virtual Asset User Protection Act has been used. Whether the pace of investigations will accelerate — or whether the FSC will name names — remains an open question.
