Woofun AI reports that the South Korean Financial Services Commission (FSC) has identified 25 suspects in connection with crypto market manipulation, a direct outcome of the regulatory framework established by the Virtual Asset User Protection Act. This enforcement milestone was highlighted by FSC Chair Lee Eog-won, marking two years since the legislation brought previously unregulated virtual assets under institutional oversight.

Investigative efforts over the last two years have uncovered more than 40 cases of unfair trading, including fraudulent activities and market manipulation. Of these, 30 cases were formally reported or referred to investigative agencies since the act took effect in July 2024.

Woofun AI data shows the average unlawful gains per case amounted to 1.4 billion Korean won ($940,000), underscoring the significant financial scale of these illicit operations.

Structurally, the Virtual Asset User Protection Act imposes strict operational requirements on virtual asset service providers (VASPs). These entities must legally separate user deposits and virtual assets from their own corporate holdings, storing client funds in designated banks. The legislation explicitly targets insider trading, wash trading, and market manipulation, thereby expanding the FSC’s authority to supervise and inspect VASPs for compliance.

Looking ahead, the FSC plans to deploy AI-driven monitoring systems to strengthen market surveillance. Lee Eog-won emphasized a proactive approach to addressing high-risk areas within the digital asset sector.

This shift toward technological enforcement signals a sustained regulatory focus on maintaining market integrity and protecting user assets.