Appeal in First Crypto Market Manipulation Case Under South Korea’s Digital Asset Law to Open June 11 as $5.1 Million Gains Claim Is Tested

The appeal in the first market manipulation case brought under South Korea’s Virtual Asset User Protection Act will begin next month, with a key dispute centered on whether prosecutors can prove about $5.1 million in alleged illegal gains.

NewsDream reported on May 18 that the Seoul High Court’s Criminal Division 16-3 set the first appellate hearing for June 11. The hearing comes about four months after the trial court issued its ruling in February.

The case was the first indictment brought through the Financial Services Commission’s fast-track procedure after the law took effect. Prosecutors accused executive A of a virtual-asset management company and alleged accomplice B of manipulating the price of a specific coin by repeatedly placing high-priced buy orders, low-priced sell orders and spoofed orders.

The lower court found the defendants’ trading exceeded the scope of ordinary liquidity provision and constituted market manipulation. It sentenced A to three years in prison, a fine of about $360,000 and forfeiture of roughly $605,000. B received a two-year prison term, suspended for three years.

The court, however, did not accept prosecutors’ claim for forfeiture of about $5.1 million in alleged illegal gains. It found that the basis for calculating the amount had not been sufficiently explained.

Both prosecutors and the defendants appealed. The appellate case will focus on proving the alleged illegal gains and on whether the trades should be deemed market manipulation.