Hans Jin Supervisory Institute: As market manipulation cases involving the use of APIs to manipulate cryptocurrency trading volumes continue to increase, it will launch a special investigation

ME News Report, April 13 (UTC+8), the Financial Supervisory Service (FSS) of South Korea publicly disclosed typical unfair trading practices used to manipulate prices via API automated order placement in the cryptocurrency market, and announced that it will promptly launch a special investigation into accounts found to be placing excessively abnormal orders. The FSS said that API trading currently accounts for more than 30% of the total buy-and-sell volume in South Korea’s cryptocurrency market.

The FSS disclosed four main manipulation methods: first, repeatedly conducting small-sized market buy and sell transactions through the API to create the illusion of active trading, while manually placing high-priced limit buy orders to push up the price, and then selling for profit after retail investors follow; second, pre-placing sell orders priced above the current holding price, and then using the API to continuously place high-priced limit buy orders to move the price to the target level before cashing out; third, creating fake buy pressure by repeatedly placing orders and then canceling them; fourth, distorting the market by trading against each other using multiple accounts.

The FSS reminded investors that around the price reset time points of each exchange, it is often a period when high-frequency API trading is concentrated, so they must remain vigilant against sudden surges in price during that time. It also warned that if an API Key is leaked, the holder may be deemed an accomplice to illegal activities such as money laundering without realizing it. (Source: Foresight News)