South Korea’s Financial Supervisory Service said that API-driven trading now accounts for roughly 30% of cryptocurrency buy-and-sell activity, raising concerns about the growing use of automated tools in the market.
According to reports from Yonhap News Agency and Maeil Business Newspaper, the regulator warned that some traders are using these systems to artificially boost volumes and influence prices. The FSS pointed to practices such as repeated small trades, spoofed orders and coordinated activity across multiple accounts.
In response, the authority said it plans to conduct targeted investigations into accounts showing excessive or irregular trading patterns linked to API usage, signaling tighter oversight of automated trading behavior.
The regulator outlined several strategies used to distort market activity. These include repeatedly placing small buy and sell orders to simulate high trading volume and submitting higher-priced limit orders to push prices upward.
In one example cited by the FSS, a trader used API-generated orders ranging from 5,000 won to 10,000 won to create the illusion of active trading before selling into the resulting price increase as retail investors entered the market. Another case involved systematically placing higher-priced buy orders to drive an asset toward a predetermined target level.
The FSS warned investors against relying on publicly shared high-frequency trading scripts and cautioned against chasing assets that experience sudden price and volume spikes without clear fundamental drivers.
The warning comes as South Korean regulators continue to strengthen oversight of the crypto sector following a series of operational and fraud-related incidents.
Authorities have recently introduced stricter requirements for exchanges, including a directive issued on April 7 mandating that internal ledgers be reconciled with actual asset holdings every five minutes. The move followed inspections that revealed delays in balance verification and weaknesses in trade suspension mechanisms.
Additional steps have been taken to address fraud risks. On April 8, the Financial Services Commission highlighted inconsistencies in withdrawal delay exemptions, noting that accounts with such exemptions were responsible for a significant share of voice phishing losses.
However, enforcement efforts have also encountered legal limitations. On April 9, a South Korean court overturned a partial suspension of Dunamu, citing unclear regulatory guidelines and underscoring ongoing gaps in the country’s crypto framework.
Sources:
https://cointelegraph.com/news/south-korea-api-crypto-trading-30-percent-manipulation-risk