South Korea’s financial authorities have investigated 40 cases of crypto market manipulation since the Virtual Asset User Protection Act took effect in July 2024, with more than 30 of these cases referred to investigative agencies.
According to the Financial Services Commission’s Chairman, Lee Eog-won, these investigations have identified 25 suspects. The average unlawful gains from these cases were approximately 1.4 billion Korean won, or about $940,000.
Lee shared these figures on July 20, 2026, marking the second anniversary of the Virtual Asset User Protection Act, which was enacted on July 19, 2024. The legislation mandates that virtual asset service providers separate user deposits and virtual assets from their own corporate holdings.
The law targets illicit activities, including insider trading, wash trading, and market manipulation. As part of the enforcement efforts, regulators imposed penalties of 125% to 165% of illicit gains in two cases.
Financial authorities plan to enhance market surveillance and investigations using artificial intelligence. “Today marks the second anniversary of the enactment of the ‘Virtual Asset User Protection Act…’ It was a meaningful time that brought the virtual asset market, which was outside the institutional framework at the time, into the fold of the law and created an opportunity to establish a user protection system for virtual assets,” Lee stated.
Authorities have indicated that they will continue to strengthen efforts to combat unfair trading in the virtual asset market. They are considering introducing account and bank-account payment suspension powers to block hidden proceeds and are reviewing a reporting and reward system for unfair trading as part of potential second-phase legislation.
