[Exclusive] FSS to examine ZKsync coin that surged '1,000%' in three hours

Up 970% in three hours before plunging

FSS begins securing and analyzing data

May shift to a formal probe if unfair trading suspected

South Korea’s Financial Supervisory Service (FSS) has begun fact-finding as part of its market surveillance over unusually sharp price swings in ZKsync (ZK), a virtual asset (cryptocurrency) listed on domestic exchange Upbit. The move comes after the coin was seen skyrocketing by about 1,000% in just three hours before plunging, prompting authorities to look into possible unfair trading such as price manipulation.

On the 3rd, the FSS Virtual Asset Investigation Bureau told Bloomingbit by phone, “We are aware that ZKsync recorded a swing of about 1,000% in a short period of time,” adding, “We are currently securing relevant materials and verifying the details.” It also said, “Depending on our assessment of the seriousness of the matter, we may swiftly shift to a formal investigation.”

The ZKsync in question saw abrupt price changes around Upbit’s system maintenance window on the 1st. The coin, which had traded around 33 won that morning, surged to 350 won at around 11:30 a.m.—just before the maintenance—jumping 970% in an instant. However, immediately after the maintenance ended at 6:30 p.m., a wave of sell orders hit the market and the price fell back to the 30-won range.

In the virtual-asset community, some have raised the possibility of price manipulation. Critics say a textbook “pump-and-dump” pattern appeared: amid the maintenance window, large buy orders concentrated to build a buy wall, followed by a sudden flood of supply.

Legal circles have also suggested the incident could potentially constitute a violation of the Act on the Protection of Virtual Asset Users. Jin Hyun-soo, managing attorney at Decent Law Office, said, “On the 1st, ZKsync showed a pattern in which large buy orders concentrated in a short period and supply was later released,” adding, “This is highly likely to fall under price manipulation, wash trading, and other unfair trading practices prohibited under Article 10 of the Virtual Asset User Protection Act.”

He added, “If an FSS investigation confirms parties who obtained illicit gains, they may face fixed-term imprisonment of at least one year or a fine of no less than three times and no more than five times the illicit gains,” and noted, “If the illicit gains exceed 500 million won, penalties are aggravated, and the illicit gains may be confiscated or disgorged; administrative penalties may also be imposed, along with liability for damages to users.”

An FSS official said, “From a market surveillance standpoint, when we detect an item with sharp short-term swings, we immediately obtain data from the exchange and analyze it,” adding, “If suspicion of unfair trading is confirmed, we follow procedures to launch a formal investigation.”