South Korean Legislative Inquiry into AVAIL Trading Practices 🚨
This year, the South Korean National Assembly is gearing up to delve into the transactions associated with the digital asset AVAIL on the Bithumb exchange, which occurred in July.
The case, presented by lawmaker Min Byeong-deok from the Democratic Party of Korea, will be further examined during an audit meeting of the Political Affairs Committee scheduled for October 17.
Investigation of AVAIL Price Dynamics 📉
Lawmaker Min has expressed concern about the token, referring to it as a “burger coin,” a term he coined to distinguish it from low market cap coins within South Korea, often known as “kimchi coins.” Burger coins are defined as those that are issued internationally yet listed on local exchanges.
Min first introduced this terminology during a previous audit that focused on issues related to the circulation of the SUI coin.
“The audit on October 17 will enable us to clarify the ongoing debate surrounding the AVAIL pricing and any possible manipulation related to its listing on Bithumb,”
Min Byeong-deok
The phrase “listing beam” describes a situation where a newly listed asset experiences a sudden spike in price at the moment of listing, followed by a precipitous drop shortly thereafter.
The Financial Supervisory Service (FSS) of Korea initiated its own investigation of AVAIL in early August, prompted by a series of suspicious transactions that took place at the end of July.
Regulators suspect that a non-identified investor might have purchased a substantial quantity of AVAIL from overseas before driving its trading activity on Bithumb on July 23.
It is believed that this particular trader gained traction online to enhance support for their buying efforts and subsequently attempted to artificially inflate AVAIL’s price through numerous transactions shortly after it began trading.
The FSS estimates that this tactic triggered AVAIL’s price to surge from approximately $0.17 to $2.56 within a mere 15-minute window, a change that was not observed on other exchanges where the token was also listed.
Call for Transparency and Accountability 📊
In light of these events, Min has reached out to financial regulatory bodies, requesting access to pertinent data for the ongoing audit.
This data is expected to encompass records related to irregular transactions involving AVAIL coins on Bithumb.
Many observers suspect that the unidentified investor may have conducted these sales on behalf of foreign nationals unable or unwilling to use domestic Australian cryptocurrency exchanges.
Min’s office stated:
“The issues regarding price manipulation associated with the Bithumb-AVAIL price fluctuations necessitate accountability from both the exchanges and the financial authorities. They have failed to protect investors adequately, and we will hold them responsible.”
Min has previously criticized cryptocurrency exchanges for neglecting the adverse effects on investors stemming from incidents of manipulation involving burger coins.
The ongoing investigation conducted by the FSS is still underway, and the agency has indicated it will refrain from disclosing any information until the investigation is completely settled, citing potential market impacts from such disclosures.
“Any commentary on the investigation’s progress could sway market prices,”
Financial Supervisory Service
Framework for Investor Protection Under Scrutiny 🔍
Bithumb has similarly opted not to discuss the ongoing investigation but has noted that it has established a system for reporting irregular transactions to financial authorities, as stipulated under the Virtual Asset User Protection Act.
This legislation encompasses measures focused on safeguarding investors and combating price manipulation.
An anonymous insider within the cryptocurrency sector suggested that the outcome of this case could serve as an important precedent for both financial regulatory authorities and investigative agencies moving forward.
Hot Take: Implications for the Crypto Landscape in South Korea 🇰🇷
This year could mark a significant moment for the South Korean cryptocurrency market as regulatory scrutiny intensifies. With government agencies and legislators prioritizing investigations into trading practices, the actions taken could lead to enhanced investor protection mechanisms. As these developments unfold, stakeholders in the crypto community will need to stay informed about potential regulatory changes that may redefine how cryptocurrency is traded and monitored in South Korea.
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