TLDR
- South Korea will target crypto market abuse including manipulation by large traders and false social media campaigns
- The FSS plans to impose penalties on financial firms for IT-related failures
- Bithumb mistakenly transferred 620,000 BTC but recovered 99.7% of it
- A task force is preparing disclosure and licensing rules under new crypto legislation
South Korea is strengthening its oversight of the cryptocurrency sector with a focus on stopping market manipulation and enforcing stricter regulations. The move comes after recent market disruptions and a major transaction error by Bithumb involving bitcoin worth billions.
Crypto Market Practices Under Investigation
The Financial Supervisory Service (FSS) of South Korea announced plans to increase supervision of cryptocurrency markets. This includes a crackdown on market manipulation and deceptive trading practices that disrupt fair pricing.
According to Yonhap, Korea's FSS announced its 2026 plan on Feb 9: investigations into high-risk crypto manipulations (whale, containment/ramp schemes, API orders, SNS misinformation) with AI text/surge detection tools; new Digital Asset Basic Act group for phase-2 legislation…
— Wu Blockchain (@WuBlockchain) February 9, 2026
The new measures were introduced in the FSS’s 2026 policy roadmap, reported by Yonhap News. The agency will focus on practices such as price manipulation by major traders, or “whales”, and artificial price increases of tokens with suspended trading on exchanges. Officials also aim to monitor price-pumping tactics using automation tools like API orders.
Social Media and False Information Also Targeted
The FSS said it will investigate the spread of false information through online channels, including social media. These messages often influence prices unfairly and mislead investors.
The agency stated it will monitor and address such behavior to protect market integrity and reduce investor risk. Officials said that stopping manipulation is essential for building trust in the growing digital asset sector.
Bithumb Error Sparks Regulatory Response
Regulators have also responded to a recent operational mistake at Bithumb, the second-largest cryptocurrency exchange in South Korea. The exchange accidentally sent 620,000 BTC, valued at around $44 billion, to hundreds of users during a promotional event.
Bithumb has reportedly recovered 99.7% of the assets. According to a BBC report, the error raised questions about the reliability of internal systems in crypto platforms. The FSS plans to hold financial firms accountable for such IT system failures.
“IT-related accidents in the financial sector can no longer be overlooked,” said a statement from the FSS. Firms may now face stricter penalties and will be expected to improve system controls and customer safeguards.
Digital Asset Basic Act Preparations Underway
The FSS also announced the creation of a task force to support the upcoming Digital Asset Basic Act. This group will develop rules related to token issuance disclosures, exchange listings, and licensing procedures.
The legislation aims to bring more structure to digital asset services, including stablecoin issuers and exchange operators. The final version of the act is expected in the first quarter of 2026.
The FSS said these updates are designed to create a safer trading environment and improve consumer protection. The focus will remain on identifying high-risk areas and making regulations clearer for all participants in the crypto market.
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