South Korean authorities are probing a dramatic price surge of the altcoin AVAIL on the Bithumb exchange, suspecting price manipulation under the newly implemented Virtual Asset User Protection Act. This act, which came into force on July 18, empowers regulators to investigate suspected cases of market manipulation within the country’s registered crypto exchanges.
The investigation focuses on a striking 1383% increase in AVAIL's price that occurred over a brief 15-minute period on July 23-24. According to reports, the coin’s price skyrocketed from $0.17 at 10 PM on July 23 to approximately $2.56, before plummeting to around $0.21 the following day. Notably, while AVAIL's price was fluctuating dramatically on Bithumb, it remained relatively stable on other platforms, hovering around $0.15.
The Financial Supervisory Service (FSS), through its Virtual Asset Investigation Bureau, is scrutinizing the activities of an unnamed individual referred to as “A,” who is suspected of orchestrating the price manipulation. The FSS believes that A was responsible for a significant volume of AVAIL transactions on Bithumb, purchasing a large amount of the coin from overseas vendors and subsequently driving trading activity on the exchange.
At one point, A held approximately 1.17 million AVAIL coins, which represented about 75% of the 1.55 million AVAIL tokens available on Bithumb. Regulators are also examining A’s use of social media to fundraise for these purchases. Reports suggest that A leveraged his substantial social media following—numbering around 22,000—to solicit funds, promising to repay investors at a premium once the trading activity concluded.
Investigators have identified a total of 119 wallets that reportedly sent funds to A, contributing to the acquisition of over 1.2 million AVAIL coins. The regulators believe that A was able to deliver substantial profits to his investors while collecting a commission for himself.
This case represents the first major test of South Korea’s new regulatory framework aimed at protecting virtual asset users and ensuring fair market practices in the burgeoning cryptocurrency sector.
August 2024, Cryptoniteuae