South Korea Refers 4 Suspected Virtual-Asset Manipulation Cases to Investigators: API-Made Fake Activity, Issuer-Inflated Volume to Keep a Listing

On September 23, 2026, South Korea's Financial Services Commission (FSC; 금융위원회 — a different agency from Taiwan's Financial Supervisory Commission) resolved at its 16th regular meeting to file a criminal complaint (고발) or notify the investigative authorities (수사기관 통보) about the suspects in 4 cases of suspected unfair trading in the virtual-asset market that it investigated together with the Financial Supervisory Service (FSS; 금융감독원). The announcement never named any virtual asset, exchange or individual, but the methods described in all 4 cases involved artificial trades made to make buying and selling look active, 3 of them relying on small, high-frequency orders. The warning signs the financial authorities flagged are things readers can check for themselves on any platform.

This article's information was checked on September 26, 2026. The parties in all 4 cases are suspects only, not people who have been indicted or convicted; the methods described below are all allegations made by the financial authorities after investigating. This article does not make any market call, and does not offer investment or legal advice.

What Happened on September 23: 4 Suspected Cases, Two Kinds of Disposition

The Financial Services Commission states that this time, the financial authorities (the FSC and the FSS) jointly investigated and then resolved to file a criminal complaint or notify the investigative authorities regarding the suspects in 4 cases of suspected unfair trading in the virtual-asset market; 3 of them were ultra-short-term price manipulation cases carried out using tools such as automated trading programs (APIs), and the remaining 1 was a case of unfair trading and price manipulation by executives and employees of a virtual-asset operating company.

Of the 4 cases, only Case 3 was disposed of as a criminal complaint (고발); the rest — Cases 1, 2 and 4 — were disposed of as notifications to the investigative authorities (수사기관 통보). The subjects of both kinds of disposition are called suspects (혐의자); until the investigative authorities reach a conclusion, or even until a court judgment becomes final, these people remain only suspects, not convicted persons.

The announcement also does not say which specific body — prosecutors or police — these 4 cases will be referred to, calling it only the "investigative authorities"; it does not name the virtual assets, exchanges or suspects involved, does not state the total number of suspects, and gives no figure for illicit gains, no fine, and no legal provision; nor does it state the period over which the conduct or the investigation took place — the only period mentioned is "several months" for Case 4. These gaps exist because the official press-reference material itself does not state them, not because this article has left them out.

How Each of the Four Cases Worked

The suspects in Cases 1 and 2 are biological brothers who each used the same method on multiple virtual assets: they first used tactics such as high-price limit buy orders to quickly accumulate the quantity they intended to manipulate, then used an automated trading program (API) to repeatedly place market buy and sell orders in small, identical quantities, making the order book flicker and appear to be trading actively — an effect the authorities call the "호가창 반짝임 효과" (order-book flicker effect). At the same time, they manually placed high-price limit buy orders to drive the price up, and once the price reached the target they had set, they quickly sold everything through low-price sell orders. The Financial Services Commission has classified this as two separate cases, each carried out by one person using the same method, rather than as a single case of the brothers acting together.

Beyond a similar manipulation method, Case 3 added one more element: to evade the exchange's limit on the number of API orders, the suspect used accounts registered in other people's names in addition to their own, and first accumulated a large pre-purchase of dozens of virtual assets. The Financial Services Commission states that the exit method was to place high-price sell orders in advance and then gradually push the price up, letting those previously placed sell orders execute in sequence, thereby liquidating the holdings. Case 3 is the only one of the 4 disposed of as a criminal complaint.

Case 4 involves a conspiracy among executives and employees, among others, of a virtual-asset operating company. The Financial Services Commission states that, to make the virtual asset they issued and operated appear to be trading actively on an exchange, these people hired a professional trading firm (the so-called "마켓메이킹 업자," or market maker) and used borrowed-name accounts to trade with each other (가장매매, meaning wash trading) — artificially inflating the trading volume. The inflated volume made up more than 90% of total trading volume, and was used both to attract investors and as a qualifying condition when applying to list on a major exchange; the announcement does not say which exchange, or over what period, this "total" trading volume was measured. The Financial Services Commission states that the issuing foundation for this virtual asset was merely a shell company set up in a tax haven, with actual issuance and operation handled by a domestic corporation the suspects had set up, and that the foundation's key figures listed in the white paper were confirmed to have an unclear or fictitious identity.

The suspects in Case 4 applied several times to list on major domestic exchanges in South Korea and failed each time, so they first listed on a mid-sized exchange where listing was easier, then used wash trading to inflate volume and falsely meet the exchange's listing-maintenance requirements, leading ordinary investors to believe for several months that trading was active. The Financial Services Commission states that the purpose of doing this was to use it as a basis for additionally listing the same virtual asset on other major exchanges, but the announcement does not say whether this virtual asset ultimately succeeded in getting listed.

What Happens After the Resolution: Still Suspicion, Not a Conviction

The parties in all 4 cases are called suspects (혐의자) throughout the announcement; the disposition is a criminal complaint or a notification to the investigative authorities, not a court judgment. Whether these people are found to have committed a crime will only be known after the investigative authorities investigate, or even after a court hears the case.

In other words, this resolution only sends the suspects to the starting point of the next process; the announcement does not say how long that will take or what the outcome will be. The financial authorities state that they will strengthen monitoring of abnormal trading, including trading patterns similar to those in this case, going forward, and will respond firmly when unfair trading is found — but this is the regulator's statement about the future, without a specific timeline.

Warning Signs the Financial Authorities Flagged

The Financial Services Commission and the Financial Supervisory Service advise: "이용자들은 이유 없이 시세가 급등하는 종목에 대한 추격매수를 자제하고, 투자종목 선정시 가상자산 설명서와 백서 등을 꼼꼼히 확인할 필요" (users should refrain from chasing prices on assets that surge for no clear reason, and should carefully check materials such as a virtual asset's prospectus and white paper when choosing an investment). The reason is that some actors may use tools such as automated trading programs (APIs) to execute a large number of trades, making trading look active or prices look highly volatile; chasing the price based only on this appearance can lead to a sudden drop at any time and losses for ordinary users. This is a warning from the regulators to investors, not buy-or-sell advice.

The second warning sign is concentration: the financial authorities point out that when a virtual asset that previously traded thinly sees its trading volume and price surge for no clear reason, or when trading volume is concentrated only on a specific exchange, artificial trading may be involved. The third warning sign concerns the issuer: the financial authorities advise that, especially when the issuing foundation is based in an offshore tax haven with an unclear substance, investors should carefully check the actual operating entity, the amount in circulation inside and outside South Korea, project progress and other such matters, and carefully check materials such as the virtual asset's prospectus (가상자산 설명서) and white paper, rather than judging only by the surface appearance of trading activity.

How to Verify This Yourself, and What It Means for Readers in Taiwan

To see the original announcement, you can find this September 23, 2026 item in the Financial Services Commission's "보도자료" (press release) list on its official website; the page itself has only the title, the date and the handling contact, with the actual content in the attached PDF press-reference material. As of the check date, September 26, 2026, the latest item on the Financial Services Commission's English press-release list was still stuck at September 16, and did not yet include this one — readers who look only at the English version would miss this announcement.

This announcement is about a case in South Korea; it does not mention Taiwan, and this article does not speculate about whether Taiwan might take similar action. But the two warning signs the financial authorities describe — "creating a false appearance of active trading through small, high-frequency trades" and "an issuing foundation based in an offshore tax haven with an unclear substance" — are things readers can check for themselves whenever they see some obscure asset suddenly look "very active" on any platform, rather than looking only at the number of trades shown on screen.

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