South Korean Regulators Crack Down on Stolen Coins Trading
South Korean regulators are taking measures to prevent traders from selling stolen coins on exchanges. This action comes in response to recent reports of a trader buying stolen NFP coins and subsequently dumping them on the Coinone exchange. The Financial Supervisory Service (FSS) and the Financial Services Commission (FSC) are spearheading this initiative to safeguard the integrity of the crypto market.
Trader Accused of Purchasing Stolen Assets
On March 28, the South Korean crypto community was rocked by revelations of a domestic investor allegedly engaging in an over-the-counter (OTC) transaction to buy stolen assets from a hacker. The investor’s social media post hinted at their knowledge of the origins of these coins, raising questions about the legitimacy of the transaction and casting doubts on Coinone’s ability to handle large NFP transactions.
- The investor admitted to purchasing the coins in an OTC deal
- The post, now deleted, also made derogatory remarks about Coinone CEO Cha Myung-hoon
Exchange’s Response and Regulatory Action
In response to these allegations, Coinone acted swiftly by adding NFP to its list of “investment cautionary coins” due to security concerns. Simultaneously, regulators pledged to investigate the transaction and probe further into claims of price manipulation. As a consequence, NFPrompt prices experienced a sharp decline on April 28, sparking concerns about market manipulation.
- Regulators are revamping systems to prevent unfair transactions before the upcoming regulations in July
- Domestic exchanges are mandated to implement abnormal transaction detection systems to flag illegal or suspicious activities
Investigation and Accountability
An unnamed regulator revealed plans to launch a comprehensive investigation into the NFP coin incident if any illegal means were employed to acquire the coins. This could potentially involve law enforcement agencies if the coins were stolen. Exchanges are currently working on establishing preemptive measures to curb unfair practices in the market.
Coinone’s Efforts in Uncovering the Truth
Coinone has initiated an internal review to determine if a leak of the NFPromt foundation’s assets was due to a hacking incident. The platform is in talks with the foundation to shed light on the matter and ascertain the facts. Meanwhile, South Korean regulators are working on regulations to prevent illicit transactions and improve communication between exchanges to mitigate risks.
Stricter Measures and Industry Standards
Regulators are considering additional provisions to restrict deposit and withdrawal activities on exchanges to prevent illicit transactions. They aim to establish industry-wide standards for sharing information on potentially illegal activities and create a safety net that triggers immediate responses from all exchanges in case of hacks or breaches. OTC transactions are under scrutiny, with regulators vowing to address any irregularities.
Hot Take: Upholding Market Integrity
In conclusion, the crackdown on traders dealing in stolen coins reflects regulators’ commitment to maintaining market integrity in the face of emerging challenges. By implementing stringent measures and fostering transparency, South Korea aims to safeguard investors and uphold the credibility of the crypto market.
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