Crypto Boom Triggers South Korea’s Push to Monitor Unfair Transactions

Cryptocurrency Market Faces Scrutiny Amid Rising Volatility

South Korea’s financial regulator has expressed growing concern over the rapid fluctuations and potential irregularities in the domestic cryptocurrency market.

With the value of virtual asset transactions now surpassing that of the Korean stock market, regulators are urging closer monitoring of these digital markets.

Speaking on 24 November, Financial Services Commission (FSC) Chairman Kim Byoung-hwan highlighted the need for vigilance.

Kim Byung-hwan, Chairman of the Financial Services Commission

During an interview with KBS, Kim stated:

“The price of virtual assets has recently been shooting up in a very short period of time, and with heavy volatility of the market itself, the government needs to closely monitor possible unfair transactions.”

A Surpassing Milestone for Cryptocurrency

Last week, the volume of cryptocurrency transactions in South Korea exceeded those in the domestic stock market for the first time.

This milestone signals a growing preference for digital assets among investors, though it also raises concerns about speculative trading and market manipulation.

Kim stressed the importance of integrating the cryptocurrency market with traditional financial systems, ensuring investor protection as a core focus.

These measures, he suggested, would help stabilise the sector while fostering its development responsibly.

North Korea’s Cryptocurrency Theft Confirmed

In a parallel revelation, South Korean authorities have concluded that North Korean state-sponsored hacking groups were responsible for a massive cryptocurrency theft in 2019.

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The National Office of Investigation of the National Police Agency identified Lazarus and Andariel as the culprits behind the theft of 342,000 Ethereum tokens from the Upbit exchange.

At the time, the stolen cryptocurrency was valued at 58 billion won (£35 million), but its current worth has soared to 1.47 trillion won (£885 million).

Police investigations revealed that 57 per cent of the stolen Ethereum was sold at a slight discount—2.5 per cent below market value—in exchange for Bitcoin through three cryptocurrency exchanges likely established by North Korea.

The remaining Ethereum was transferred to 51 foreign exchanges for laundering.

Balancing Regulation and Economic Integration

As cryptocurrency markets evolve, South Korea’s regulatory framework remains under scrutiny.

Chairman Kim acknowledged the importance of transparent corporate governance but advised caution regarding proposed revisions to the Commercial Act.

These revisions aim to expand corporate directors’ duties to include greater accountability to shareholders, which proponents argue could protect minority investors from exploitation by larger firms.

Kim, however, raised concerns about the broader economic implications of such reforms.

He warned that excessive regulation could negatively affect corporate management and disrupt the capital market.