South Korea Flags API Trading at 30% of Crypto Volume
South Korea's Financial Supervisory Service (FSS) said Monday that API-based trading now accounts for 30% of crypto buying and selling volume, warning that some traders are using automated tools to increase volume and control prices.
According to reports from Yonhap News Service and Mail Business newspaper, the regulator warned that some traders are using automated tools to increase volume and control prices, citing repeated micro-transactions, improper orders and coordinated practices across multiple accounts.
The FSS said it will conduct targeted investigations against accounts suspected of using excessive or irregular trading APIs, which will mean closer monitoring of automated trading activity in the market.
The warning follows South Korea's efforts to curb abuse of the broader crypto market, as regulators step up enforcement while parts of the legal framework are in place.
The regulator lists fraud methods, warns investors
According to the reports, the FSS has revealed several methods used to manipulate prices, which include repeatedly placing small market buy and sell orders to create active trades. The regulator added that traders were using high-priced price orders to artificially inflate prices.
In one case reported by FSS, a trader used API-driven orders ranging from 5,000 won (about $3) to 10,000 won ($3) to simulate trading activity before selling the price when retail investors entered the market. In another case reported by the FSS, a trader set a target price and submitted multiple buys to bring it to that level.
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The FSS warned users against indiscriminately using high-frequency trading codes shared online and urged investors not to chase assets that show price increases and trading activity without clear reasons.
South Korea tightens enforcement where regulatory gaps exist.
The warning comes as South Korean authorities tighten controls on crypto exchanges following a series of activity and fraud-related incidents.
On April 7, regulators ordered exchanges to reconcile internal ledgers with actual asset holdings every five minutes after they discovered delayed accounting checks and weak trade-stopping systems.
South Korean authorities have also moved to strengthen anti-fraud protections. On April 8, the Financial Services Commission (FSC) said inconsistent withdrawal delay exemption rules allowed bad actors to move money quickly, with exempt accounts accounting for most phishing losses.
At the same time, enforcement efforts have faced legal limitations. On April 9, a South Korean court overturned a partial ban on Appbit operator Dunamu, citing unclear laws and gaps in the regulatory framework.
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