Two South Koreans arrested for alleged price manipulation on Bithumb

by

As a seasoned financial analyst with over two decades of experience, I have witnessed the evolution of financial markets from traditional stocks and bonds to digital assets like cryptocurrencies. With this extensive background, it is alarming to see that the crypto market remains plagued by instances of fraud and manipulation, as demonstrated in the recent case involving the South Korean men Lee and Kang who allegedly manipulated the price of ACE on Bithumb.

My personal experience has taught me that such activities not only undermine investor trust but also tarnish the reputation of an entire industry. As a result, it is essential for regulatory bodies like the South Korean Financial Services Commission to swiftly address these violations and establish robust measures to protect investors from manipulation schemes.

In this case, the quick action taken by the authorities in placing the investigation on the “Fast Track” is commendable. However, we must remember that the fight against fraud and market manipulation is an ongoing battle that requires constant vigilance and collaboration between regulatory bodies, exchanges, and industry participants.

To lighten the mood, let me share a little joke: Why was the cryptocurrency always cold? Because it lived on the blockchain, of course! But in all seriousness, the crypto market needs to grow up and mature if it wants to be taken seriously as an asset class, and that means eliminating bad actors who seek to exploit unsuspecting investors.

Two South Korean individuals are under scrutiny for alleged involvement in market manipulation on the cryptocurrency exchange, Bithumb. Reportedly, these two individuals amassed approximately $5 million by artificially influencing the value of the Fusionist token, known as ACE.

Based on a January 3 report from Digital Asset, the Virtual Asset Joint Investigation Team of the Seoul Southern District Prosecutors’ Office has arrested Lee, a 33-year-old CEO of a virtual asset operator named M, and Kang, a former employee of M, for suspected market manipulation on Bithumb. This suspect activity is related to the allegations of price manipulation in the cryptocurrency market.

The duo faced accusations for engaging in illegal activities, namely price manipulation, and for allegedly breaking the rules set forth by the South Korean Virtual Asset User Protection Act.

According to an investigation led by Chief Park Geon-wook, this duo is suspected of artificially influencing the value of the native token (ACE) associated with the blockchain gaming project Fusionist. In South Korea, it’s only on Bithumb – a well-known cryptocurrency exchange – where ACE is available for trading in the market.

Beginning October 25, 2024, this instance has been designated as an urgent matter by the South Korean Financial Services Commission, promptly moving it to the “Express Lane” for swift handling due to suspected breaches of the Virtual Asset User Protection Act.

Based on the statement from the press release, it is alleged that Lee and Kang are said to have traded approximately 1.22 million ACE tokens. They reportedly manipulated the market by creating false purchase and sale orders, which artificially increased the value of ACE tokens. As a result, they made an estimated profit totaling about 7.1 billion won (around $4.8 million).

On July 22, 2024, I observed an intriguing spike in the trading volume of Fusionist tokens. Remarkably, this single-day surge multiplied the volume nearly fifteenfold, reaching approximately 2.45 million. Such a dramatic increase, which piqued my curiosity, suggested potentially suspicious trading activities that might have been concealing a larger scheme.

Currently as I speak, ACE has experienced a minor decrease of 0.3% over the last day, based on CoinGecko data. On the other hand, in the past week alone, the token has shown an increase of 1.1%. Contrastingly, over the course of the past year, the Fusionist token has plummeted by approximately 75%. As of now, ACE boasts a market capitalization of around $92 million and a fully diluted valuation of $319 million.

Worldwide, the trading volume for ACE amounts to approximately $7.8 million over the last 24 hours. This represents a 15% decrease compared to the day before, indicating a slowdown in trading activity.

ACE was first listed on Bithumb in August 2024 at a starting price of around 3,722 won ($2.53).

Read More

2025-01-03 17:48