Authorities may extend stock market enforcement tools to crypto, aiming to curb price manipulation and protect investors.
South Korea is exploring measures to freeze unrealized crypto gains in accounts suspected of market manipulation. The move reflects the country’s effort to align cryptocurrency oversight with traditional securities regulations and strengthen investor protection.
The Financial Services Commission (FSC) is reviewing a system that would suspend crypto transactions before illicit profits are realized, similar to mechanisms used in the stock market. Current rules require court warrants, giving suspects time to move or hide assets. Regulators are concerned about tactics such as front-running, wash trading, and large buy orders, which can generate significant unrealized profits that disappear quickly.
South Korea’s first phase of crypto legislation focused on user protection, while the second phase aims to cover stablecoin rules and stricter market abuse controls. Recent developments include potential bank-level liability for exchanges and enforcement powers for tax authorities over crypto stored in cold wallets. These measures highlight a shift toward proactive intervention, allowing authorities to prevent manipulation and protect market participants before damages occur.
By extending traditional market safeguards to cryptocurrency, South Korea is positioning itself as a pioneer in robust crypto regulation, ensuring stronger oversight and investor confidence in digital assets.
Disclaimer
This content is for informational purposes only and does not constitute financial, investment, or legal advice. Cryptocurrency trading involves risk and may result in financial loss.