Two Months Since Virtual Asset Act Enforcement… Lee Bok-hyun "Zero Tolerance for Unfair Trading"

Lee Bok-hyun, Financial Supervisory Service Chief, Holds Meeting with Virtual Asset Industry
Appears Aware of Suspected Market Manipulation Cases Including 'Availe Incident'
Authorities Urge Industry to Monitor Unusual Transactions and Protect Users

On the 26th, Lee Bok-hyun, Governor of the Financial Supervisory Service, met with CEOs of virtual asset exchanges and stated, "If any unfair trading allegations are found, the supervisory authorities will concentrate all investigative capabilities and hold them strictly accountable under the zero-tolerance principle." The photo shows Lee Bok-hyun, Governor of the Financial Supervisory Service, attending the "Open Discussion for Capital Market Advancement" on the 12th. Photo by Heo Young-han younghan@

On the 26th, Lee Bok-hyun, Governor of the Financial Supervisory Service (FSS), met with CEOs of virtual asset exchanges and stated, "If any unfair trading suspicions are found, the supervisory authorities will concentrate all investigative capabilities and hold them strictly accountable under a zero-tolerance policy." This remark is seen as a response to suspected market manipulation cases such as the 'Avail incident' that occurred in July.

On the same day, Governor Lee held a meeting with the industry, including won-coin market exchanges, at the FSS headquarters in Yeouido in the morning, warning, "We will conduct thorough monitoring of sudden price fluctuations of newly listed coins and the spread of unverified rumors."

On July 23, Avail, listed on Bithumb, a domestic virtual asset exchange, surged over 1000% from 236 won to 3,500 won, then plummeted 80% in one day, causing investor losses due to extreme price volatility. Particularly, the damage was concentrated on domestic exchanges, and Bithumb’s lack of vigilance and management was also criticized. During this process, suspicions arose that an influencer in the virtual asset industry was behind the market manipulation, prompting financial authorities to launch an investigation.

Governor Lee also urged virtual asset exchanges to strengthen abnormal transaction monitoring obligations and user protection. He said, "Please operate a proactive monitoring system using market information and reports related to abnormal transaction monitoring obligations," and added, "We ask you to actively communicate with the supervisory authorities from the early stages of abnormal transaction investigations."

He further stated, "Please incorporate and strictly comply with self-regulatory measures prepared by the industry itself, such as best practices for transaction support, into your internal regulations," and added, "We urge you to make every effort to ensure there are no disruptions in user protection."

According to the best practices of the Digital Asset Exchange Association (DAXA), exchanges are obligated to collect and provide essential information necessary for users. Exchanges must provide users with the latest information quarterly through the original whitepaper, Korean materials explaining the main contents of the whitepaper, virtual asset explanatory documents using a common format, and links to major disclosure media of the issuer or operator.

Governor Lee also announced plans to prepare the second phase of the Virtual Asset Act in cooperation with related agencies. He said, "To resolve regulatory uncertainties and build market trust, we will monitor international regulatory trends and actively discuss the direction of the second phase legislation with related agencies."

This content was produced with the assistance of AI translation services.