ME News reports that on April 13 (UTC+8), the Financial Services Commission (FSC) of South Korea disclosed typical unfair trading practices involving automated order manipulation via APIs in the cryptocurrency market and announced it will promptly launch targeted investigations into accounts exhibiting excessively abnormal order activity. The FSC stated that API trading currently accounts for over 30% of total trading volume in South Korea’s cryptocurrency market. The FSC revealed four primary manipulation methods: first, repeatedly placing small market buy and sell orders via API to create a false impression of high trading activity, while manually placing high-limit buy orders to push prices upward, then selling after retail investors follow suit; second, pre-placing sell orders above holding prices, then using API to continuously place high-limit buy orders to drive prices to a target level before cashing out; third, repeatedly placing and canceling orders to fabricate false buying pressure; and fourth, using multiple accounts to engage in wash trading to distort market conditions. The FSC warned investors that price reset periods on exchanges are often times of concentrated high-frequency API trading and urged caution regarding sudden price spikes during these intervals. It also cautioned that if an API key is compromised, the holder may unknowingly be deemed an accomplice in illegal activities such as money laundering. (Source: Foresight News)
South Korea's FSS Investigates API-Based Market Manipulation in Crypto Trading
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Summary
South Korea’s FSS is investigating API-based market manipulation as trading activity in the crypto market increases. The regulator identified four tactics, including fake trading through repeated small orders and high-limit purchases to inflate prices. API trading now accounts for over 30% of total trading volume. The FSS urged investors to monitor for sudden price spikes near exchange resets and warned of risks from compromised API keys, which could result in money laundering charges.
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