South Korean financial authorities have opened more than 40 investigations into alleged cryptocurrency market manipulation and other unfair trading under the Virtual Asset User Protection Act, which took effect on July 19, 2024. The law marked its second anniversary on July 19, 2026. Lee Eog-won, chair of the Financial Services Commission, said the cases involved suspected manipulation, wash trading and other fraudulent activities. More than 30 cases were referred to investigative agencies and 25 individuals were identified as suspects. Lee said average unlawful gains per case reached about 1.4 billion Korean won, roughly $940,000. He added that regulators will strengthen AI‑based surveillance and monitoring systems, focusing on high‑risk areas.

The Virtual Asset User Protection Act requires virtual asset service providers to keep customer holdings separate from company assets and to deposit user funds with banks. It also gives regulators authority to inspect providers and to act against insider trading, wash trading and market manipulation. South Korean officials have used those powers in recent enforcement actions, including two cases referred to prosecutors earlier this month. One case involved a trader accused of acquiring close to half of a token’s circulating supply before selling into rising demand. Regulators have warned about sharp price and volume movements linked to low‑liquidity tokens. The Financial Intelligence Unit referred about 40 unregistered crypto operators to law enforcement in June and warned users about risks from platforms operating outside the registration system. The government is also moving to extend state asset management rules to cover digital assets beyond real estate.

Regulators have not released a complete public list of the 40‑plus cases or the status of each referral. As the two‑year milestone passes, officials say they will continue to improve AI‑driven surveillance and monitoring to protect crypto market participants.