In response to reports of unfair cryptocurrency trading practices in South Korea, the country’s financial regulator is considering a class action system to help protect investors. Unfair practices involve different deceptive, unethical, or fraudulent approaches to acquiring business success.
Such practices could include but are not limited to fraudulent gift offers or free prizes, false representation of services, and non-compliance with security standards. The regulators aim to end all these practices to guarantee the safety of crypto investors and users.
Class Action Lawsuit System Against Unfair Crypto Trading Practices
According to a report in local South Korean media, the class action lawsuit became necessary for the nation’s officials after the incident with Terra in May 2022.
Several complaints have reached the Financial Services Commission (FSC) concerning the losses investors incur due to unfair crypto trading practices in the country. These practices include insider trading, market manipulation, wash trading, and other forms of fraud.
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A South Korean daily newspaper obtained information about the proposed plan of the FSC to implement a class action lawsuit system. The officials noted that the class action law would apply to all illegal activities ongoing in the country. As such, the securities sector and the field of digital currencies are no exception.
The report also cited that the FSC does not consider digital currencies as finance. In the meantime, no one can tell whether or not the regulators’ viewpoint will prevail shortly.
Information on Token Listing Bribes
The report reveals trading platforms allegedly list certain digital assets to collect bribes in South Korea. As such, certain officials are joining forces to expand probes channeled to digital currency listing bribes to end such practices. However, this will only take effect if more evidence surfaces.
The officials are investigating the matters concerning these practices, with several ongoing developments. A notable example of such developments is the arrest of a Coinone employee. The report said the accused received a $1.5 million bribe to list 25 digital assets on the Coinone trading platform.
Furthermore, the South Korean market has been going through difficult times due to several thefts and fraudulent cases in the country.
The nation had recorded a series of hacks, such as that of GDAC, which lost about $13 million to hackers at the time. In another report, Bithumb came under a police probe for reportedly manipulating the prices of listed digital assets.
According to the FSC class action system, the commission has not yet provided details on how the proposed lawsuit would work or when it could be implemented. However, the regulator will continue to monitor the situation closely and take action as necessary to protect investors.
Featured image from Pixabay and chart from Tradingview
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Eli brings an eclectic point of view to market analysis. Currently, he writes about various asset classes, including Crypto and Stocks.