Increase in Suspected Fraudulent Transactions
Need for IT Technology and Information Analysis Capabilities
As suspicious fraudulent trading cases combining information and communication technology (IT) have been increasing in the virtual asset market recently, financial supervisory authorities have decided to cooperate with the Korea Internet & Security Agency (KISA).
On the 27th, the Financial Supervisory Service (FSS) and KISA signed a memorandum of understanding (MOU) to cooperate in investigating unfair trading in virtual assets.
In the virtual asset market, not only on-exchange price manipulation but also suspicious fraudulent trading combined with IT technology has frequently occurred. Both organizations, possessing specialized capabilities in investigating unfair trading and IT security, recognized the need for cooperation and thus initiated collaboration.
In fact, a recent cyberattack occurred on a specific coin network, restricting ordinary investors from transferring coins on the blockchain. However, coins held by the issuing foundation were transferred in large quantities to domestic virtual asset exchanges and then cashed out normally. There are suspicions that this may be fraudulent trading.
Virtual asset transactions are highly related to IT technology, so investigating unfair trading in virtual assets requires specialized technical analysis capabilities such as hacking, concealment, and manipulation.
The Financial Supervisory Service and the Korea Internet & Security Agency (KISA) signed a memorandum of understanding (MOU) on cooperation for investigating unfair virtual asset transactions on the 27th at the FSS headquarters. From left: Jaehun Lee, Head of Virtual Asset Investigation and Analysis Team at the Financial Supervisory Service; Jungho Moon, Director of Virtual Asset Investigation Bureau at the Financial Supervisory Service; Byungchil Kim, Deputy Director at the Financial Supervisory Service; Bokhyun Lee, Governor of the Financial Supervisory Service; Sangjoong Lee, President of the Korea Internet & Security Agency; Jinyoung Oh, Head of Information Security Industry Division at KISA; Seongjae Lee, Head of Security Technology Group at KISA; Yonggyu Park, Head of Threat Analysis Division at KISA; Seunggu Ji, Head of Incident Response Technology Team at KISA. Photo by Financial Supervisory Service
Accordingly, the FSS plans to establish a cooperative investigation system for cyber intrusion incidents disrupting the virtual asset market by signing an MOU with KISA. They will also share virtual asset tracking information. If necessary, they will conduct education and personnel exchanges to train specialized investigators, strengthening the cooperation system to foster a sound virtual asset market and protect users.
Lee Bok-hyun, Governor of the FSS, said, "Various issues have been highlighted due to regulatory gaps in the virtual asset market, but with the enforcement of the law in July this year, regulations on unfair trading will be fully implemented."
He added, "Unlike investigations in the existing capital market, unfair trading in the virtual asset market requires digital information analysis such as verifying facts related to cyberattacks, which led to the signing of this MOU. Based on KISA's cooperation, we will establish an immediate and efficient response system."
Lee Sang-jung, President of KISA, said, "To respond to increasingly sophisticated cybercrimes, not only technology development but also organic cooperation among investigative agencies and related organizations is essential. We will strive to share the specialized capabilities of both organizations and build a practical cooperation model."
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