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"FSS said to be considering dedicated special judicial police for crypto price manipulation"
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Summary
- The Financial Supervisory Service (FSS) has reportedly been internally reviewing a plan to establish a special judicial police unit dedicated to investigating virtual asset price manipulation.
- If a special judicial police unit for virtual asset price manipulation is introduced, conduct that undermines market order—including price distortions and organized price manipulation—is expected to become a key investigative focus.
- The initiative is seen as intended to strengthen protection for virtual asset investors by addressing limitations of the existing capital market special judicial police.
South Korea’s financial authorities are reportedly considering introducing a special judicial police unit dedicated to investigating price manipulation in the virtual asset (cryptocurrency) market.
According to industry sources on the 12th, the Financial Supervisory Service (FSS) is internally reviewing a plan to establish a special judicial police unit specializing in virtual asset price manipulation. The FSS currently operates a special judicial police unit for the capital market that investigates unfair trading in the stock market under the Capital Markets Act, but virtual assets are excluded from its scope—prompting calls for a separate investigative framework.
If a special judicial police unit for virtual asset price manipulation is introduced, key investigative targets are expected to include price distortions by so-called trading rings and organized price manipulation that undermines market order. The organization is likely to resemble the capital market special judicial police, but the applicable legal basis would likely fall under the legal framework for virtual assets. This would require establishing a separate legal basis in advance.
Separately, the FSS is also preparing to launch a special judicial police unit for livelihood-related financial crimes, dedicated to illegal private lending, voice phishing, insurance fraud, illegal financial investment and virtual asset investment scams. However, while the livelihood unit is expected to focus on investment fraud such as false or exaggerated advertising and fraudulent solicitations, the virtual asset price manipulation unit would be functionally distinct as an organization dedicated solely to price manipulation.
The special judicial police system grants limited investigative authority to officials at administrative agencies for crime areas that require specialized expertise. The move is seen as aimed at bolstering protection for virtual asset investors by addressing shortcomings in the existing framework for investigating unfair trading in capital markets.
