The Korea Financial Services Commission plans to study suspending account payments for virtual assets suspected of market manipulation

Odaily Planet Daily reports that Korean financial authorities are studying the introduction of a “payment suspension” system in virtual asset price manipulation cases to prevent suspects from transferring or concealing illegal gains during investigations. The report states that during a routine meeting in November last year, the Korea Financial Commission discussed relevant cases and proposed referencing practices in the capital market for stock price manipulation, such as preemptively freezing accounts suspected of manipulating virtual asset prices to restrict withdrawals, transfers, and payments. The report points out that under the current system, confiscation or recovery of illegal virtual asset proceeds usually requires investigation by prosecutors and a court order, which poses a risk of asset transfer during this period. Internal members of the Financial Commission believe that the upcoming “Virtual Asset Second-Phase Legislation” could introduce a payment suspension mechanism similar to that in the Capital Market Act to more effectively prevent unrealized gains from being disposed of prematurely. Officials from the financial authorities stated that since virtual assets are easier to conceal once transferred into personal wallets, such a system could help strengthen early-stage regulation and asset preservation. (NewSIS)