Financial Supervisory Service: "Using Programs to Inflate Prices and Dispose is Illegal"

The Financial Supervisory Service (FSS) has reiterated the main types of unfair trading practices, as many are unaware of the Virtual Asset User Protection Act, which prohibits unfair trading activities. Special caution is advised for the 20s and 30s who are particularly interested in virtual asset investments.

According to the FSS on the 21st, since the introduction of the Virtual Asset User Protection Act on July 19 last year, 52.5% of abnormal transaction prevention measures by virtual asset exchanges were imposed on users in their 20s and 30s by the end of the same year.

A significant number of users in their 20s and 30s were also included among those subject to the FSS's unfair trading investigations.

The FSS explained, "The subjects of the investigation have been investing since before the implementation of the Virtual Asset Act, claiming they were unaware their trades were illegal or that the transactions were made by mistake," adding, "It seems they are trading as per custom without fully understanding the contents related to the Virtual Asset Act."

The FSS stated that submitting concentrated high-price buy orders through APIs (Application Programming Interfaces) shortly before or after the time when the exchange's price fluctuation rate is reset or during periods when virtual asset deposits and withdrawals are suspended, causing a sharp rise in virtual asset prices and trading volumes, and then disposing of holdings when buying pressure is introduced, is considered an unfair trading practice prohibited by law.

Additionally, if one's buy and sell orders are repeatedly matched during the automatic buying and selling process through APIs, it may be detected as wash trading. If multiple accounts are operated to simultaneously submit buy and sell orders through APIs, and the buy and sell orders between these accounts are repeatedly matched, it may be identified as matched orders.

Exchanges identify abnormal transactions according to internal standards and notify the financial authorities if they determine there is a possibility of unfair trading.

Furthermore, using important information such as trading support (listing) of virtual assets obtained in advance from insiders to buy and sell the relevant virtual assets on other exchanges is also included in unfair trading activities as insider trading. Also, pre-purchasing virtual assets and then encouraging others to buy through SNS, and selling the pre-purchased virtual assets when buying pressure is introduced and prices rise, is also considered an unfair trading practice.

The FSS emphasized, "If such acts are recognized as unfair trading suspicions through FSS investigations and reported to the prosecution, criminal penalties and fines may be imposed," adding, "Even if one trades according to custom without knowing the law, it does not affect the judgment of law violation."