[Exclusive] Signs of 'Price Manipulation' in Cryptocurrencies on ISMS-Certified Exchanges

Listing of 'Victory Tournament' on Foblegate
Signs of Price Manipulation Amid Listing on Domestic Cryptocurrency Exchange Coinone

[Asia Economy Reporter Gong Byung-sun] Signs of price manipulation were discovered in virtual currencies traded on a cryptocurrency exchange certified with the Information Security Management System (ISMS). It is presumed that the operating company and the price manipulation forces have been conducting price manipulation together. However, the cryptocurrency exchange was unable to identify the issuer, operating company, or business status of the relevant virtual currency.

According to our coverage on the 15th, Victory Tournament promoted investment by announcing that listing on Coinone was confirmed. However, our investigation revealed that the Coinone listing was actually rejected.

The price manipulation took place in KakaoTalk group chats. According to Asia Economy's investigation on the 15th, a person named A created several KakaoTalk group chats to provide information related to Victory Tournament. He appears to have engaged in organized activities together with ‘Seyang Corporation,’ presumed to be the operator of Victory Tournament. Mr. A even posted photos of meetings with Mr. B, the CEO of Seyang Corporation, in the group chats.

They gathered investors even before Victory Tournament was listed on the exchange Poblegate on February 15. They induced investors to purchase Victory Tournament tokens, assuring that the price would rise soon after listing. Mr. A said, "We will do market making for a week after listing so that retail investors can participate." Indeed, Victory Tournament surged from 50 won to 300 won on the day of listing.

However, shortly after, the price of Victory Tournament dropped to 25.70 won, and investors wanted to sell. Then, on March 16, Mr. A claimed that the listing on Coinone was 100% confirmed and that the price would recover. A whistleblower explained, "They told us to be reassured that the Coinone listing would happen soon," adding, "In fact, many people bought more."

The problem is that the Coinone listing of Victory Tournament was false. A Coinone official stated, "It is true that Victory Tournament applied for listing, but it was not listed due to the policy of the screening committee." However, Mr. A did not inform investors that the listing was rejected, and investors are still waiting for the Coinone listing.

Victory Tournament White Paper. It claims to be a sports entertainment featuring battles in the Colosseum style, but it is difficult to determine exactly what kind of sport it is. (Source=Victory Tournament)

The business content of Victory Tournament itself is also poor. According to the whitepaper, it claims to be a multi-sports platform, but it is difficult to find specific information about which sports or how the business is conducted. Investors asked Mr. A several times about the whitepaper, but he only responded that how many more people join is more important than the content. Recently, he also claimed to be involved in a cosmetic lifting-related business, but its substance is unknown. Our reporter even visited the office of Seyang Corporation located in front of Samsung Station in Seoul, but confirmed that no one was present.

Poblegate, which issued a security certificate to a cryptocurrency showing signs of price manipulation: "Issuer, operator, and business status not verified"

There are also criticisms that Poblegate's management was inadequate. In May, Poblegate issued the ‘Hatch Labs Smart Contract Security Certificate’ to Victory Tournament, thereby increasing its credibility. Poblegate stated that the issuer, operator, and business status of Victory Tournament have not been verified. A Poblegate official said, "However, if involvement in crime or disclosure negligence is confirmed, we will designate it as a cautionary item and proceed with delisting after review."

Professor Hong Ki-hoon of Hongik University’s Department of Business Administration explained, "If the signs of price manipulation of Victory Tournament are proven true, Poblegate, which provided the trading platform, also bears responsibility," adding, "However, under current law, there is no clear legal basis to hold exchanges accountable."