South Korean Regulator Targets API-Driven Crypto Manipulation

South Korea's Financial Supervisory Service (FSS) has announced a crackdown on automated crypto trading, revealing that API-based transactions now represent approximately 30% of the market's total buy-and-sell turnover. The regulator warned that a segment of traders is utilizing automated tools to simulate market activity and manipulate asset prices. According to the FSS, specific tactics identified include 'spoofing' and the use of coordinated accounts to create a false impression of liquidity. The regulator highlighted cases where traders executed repeated small orders ranging from 5,000 to 10,000 won (roughly $3 to $6) to lure retail investors before selling into the resulting price spikes. Other identified abuses include the use of high-priced limit orders to artificially drive prices toward specific targets. This move is part of a wider regulatory tightening in the region. On April 7, exchanges were ordered to reconcile internal ledgers with actual asset holdings every five minutes following inspections that revealed weak trade-halting systems. Additionally, the Financial Services Commission (FSC) recently addressed loopholes in withdrawal-delay exemptions that had been exploited for voice phishing scams. Despite the intensified oversight, the regulatory environment remains in flux. A recent court decision overturned a partial suspension of Dunamu, the operator of the Upbit exchange, citing ambiguities in the current legal framework. The FSS continues to urge investors to avoid assets showing sudden, unexplained price spikes and to be cautious of high-frequency trading code shared online.