[Exclusive] 2266 Times Increase in 15 Minutes... What Happened to Virtual Currency 'Rueda'?

2266x Increase in 10 Minutes After Listing... Halved 5 Minutes Later
Sharp Volatility... Suspicions of Wash Trading
Progress Needed for Institutional Inclusion Under 'Teukgeumbeop'

Price fluctuation trend of virtual currency Rueda (Source: Screenshot from Coinbit homepage)

[Asia Economy Reporter Minwoo Lee] It surged 2,266 times in just 15 minutes before plunging back to half its value. This is the story of the recently listed cryptocurrency 'Rueda.' While the fear caused by the spread of the novel coronavirus (COVID-19) has made global stock markets fluctuate unprecedentedly, the coin market is showing even greater volatility.

According to the domestic cryptocurrency exchange Coinbit on the 25th, Rueda, which was listed at 8:05 PM on the 23rd, skyrocketed from 30 won to 68,000 won within 10 minutes of listing, a 2,266,000% increase. Then, within 5 minutes, it dropped about 45%, falling to 37,500 won. After fluctuating repeatedly, it was trading around 52,500 won as of 9 AM that day.

The problem is that such drastic price fluctuations occurred despite no significant positive news. Rueda was created to be used for payments such as materials, equipment rentals, and wages at construction sites. The intention is to enable transparent and efficient transactions based on blockchain technology. However, it is difficult to even find an official website, and the whitepaper, which serves as the business plan for the blockchain platform, lacks any information about the business entity or partners. The first page of the whitepaper even states that it assumes no legal responsibility. Moreover, Rueda is not listed on CoinMarketCap, which tracks the market status of 5,255 cryptocurrencies worldwide and exchanges. The only exchange where it is currently listed is the domestic small-to-medium exchange Coinbit.

Because of this, suspicions have been raised that the price surge immediately after listing was due to 'fishery-style wash trading.' This means that internal parties repeatedly bought and sold to intentionally inflate the price. An industry insider pointed out, "Cryptocurrencies experience more extreme fluctuations than the stock market, but that usually happens when some information circulates. A sudden surge right after listing without any news is suspicious." Previously, Upbit, the largest domestic exchange, was also embroiled in a similar controversy. Three people, including Song Chi-hyung, chairman of Dunamu, the operator of Upbit, were indicted without detention in December 2018 on charges of embezzling 149.1 billion won through fake accounts and wash trading worth 4.267 trillion won. They were acquitted in the first trial held at the end of January this year.

As even Bitcoin, considered the 'blue chip,' shows extreme volatility, there are calls for institutional-level regulation. According to Upbit, Bitcoin, which was 9.54 million won on the 12th, plunged to 5.49 million won the next day. Since the amendment to the 'Act on Reporting and Using Specified Financial Transaction Information' (Special Financial Transactions Information Act, or Specified Financial Act), which imposes anti-money laundering obligations on virtual asset service providers at the level of financial institutions, passed the National Assembly plenary session on the 5th, there is a need for full-fledged integration into the regulatory system. A Financial Services Commission official explained, "Since the Specified Financial Act includes provisions such as the reporting system for cryptocurrency exchanges, even if it is not direct and detailed management at the level of securities firms, it will be possible to indirectly enforce consumer protection against such wash trading."