Two South Korean men were arrested for allegedly manipulating the price of the ACE token on the Bithumb cryptocurrency exchange. The men are charged with scamming some $5 million through illegal price manipulation.
According to a local media source, Mr. Lee, 33, the CEO of a virtual asset company and Mr. Kang, 28, a former employee, were arrested by the Seoul Southern District Prosecutors’ Office on January 3. Prosecutors charged them for violating the “Virtual Asset User Protection Act.” They made illicit profits of around 7.1 billion won (roughly $5 million), the prosecution says.
The men had manipulated the price of ACE, an otherwise virtual token only listed on South Korean exchange Bithumb, by posted fake orders. Using different methods they tricked other traders. For instance, they faked such high trading activity by placing fake buy orders and market orders. This made the market appear booming and more and more people started to trade ACE.
Bithumb ACE Token Price Manipulation Sparks 15x Trading Surge
The two men then sold around 1.22 million ACE tokens, pushing the price, the prosecutors claim. And they got rich by fooling others into buying. ACE trading on Bithumb saw a 15x increase in trading volume in just one day. Currently, the trading volume of ACE tokens is about 2.45 million, as the last figures were recorded on July 22, 2024. The fact that their manipulation caused a sudden spike in trading activity proved the constant capitalization wrong.
The Fast Track terminology is important because this case is the first one to be processed through the system. The Financial Services Commission implemented this in October 2024 to speed up processing for types of violations regarding virtual assets. The fast track system allows crypto market more quickly to detect price manipulation and other illegal activities.
This case exemplifies the rising trend with regard to cryptocurrency market manipulation, explained the prosecutors’ office. However, they are treating it seriously and keeping on the investigation.
If convicted, Mr. Lee and Mr. Kang face severe penalties. It should be a warning to other crypto market players. This demonstrates that it is illegal to manipulate prices for one’s own gain and that the consequences can be severe. Investors are also urged to look out for misleading market trends.
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