South Korean Authorities Set to Initiate Thorough Investigations into Unfair Crypto Transactions

South Korean regulators are set to launch extensive investigations into what they term “unfair crypto transactions.” The Financial Services Commission (FSC) announced on July 7 that it will establish an “investigation system” that will commence operations on July 19, coinciding with the implementation of the Virtual Asset User Protection Act. The FSC will collaborate closely with the Financial Supervisory Service (FSS), creating a specialized organization to investigate transactions involving undisclosed information and price manipulation trading. The regulators will also target entities and individuals suspected of trading self-issued coins for personal gain. They will analyze data from crypto exchanges and rely on reports submitted through the FSS’s new reporting center. Additionally, the FSC will work with overseas regulators and foreign crypto exchanges, examining cross-border transactions, hacking incidents, and anonymous transactions. The FSC will also verify claims made by crypto operators who allege they have fallen victim to hacking attacks. Convicted offenders will face fines, warnings, and cautions. In severe cases of unfair crypto trading practices, individuals could be sentenced to over one year in jail. The regulator plans to introduce a system of fines, with offenders required to pay three to five times the amount earned through unfair methods. More serious offenders may face longer jail terms, with the possibility of life sentences for the most egregious cases. The investigation system will be activated immediately on July 19.