The South Korean National Assembly is set to investigate transactions involving the altcoin AVAIL on the crypto exchange Bithumb in July amid suspicions of price manipulation. Lawmaker Min Byeong-deok, of the Democratic Party of Korea, will bring the case before an audit held by the Political Affairs Committee on October 17. AVAIL has been labeled as a “burger coin,” which refers to tokens issued overseas but listed on domestic crypto exchanges. The focus of the audit will be on the recent controversy over AVAIL prices, as well as listing beam and manipulation suspicions on Bithumb.
The Financial Supervisory Service launched its own probe into AVAIL in early August after suspicious transactions in late July. An unnamed investor is suspected of buying a large amount of AVAIL from overseas vendors and then leading trading on Bithumb on July 23. This investor allegedly drummed up support online and attempted to spike prices through post-listing transactions, causing prices to rise from $0.17 to $2.56 in just 15 minutes. The regulator believes that only AVAIL prices on Bithumb were affected, with prices remaining steady on other exchange platforms.
Lawmaker Min has demanded relevant data from financial regulators for the audit, including the status of abnormal transactions of AVAIL coins listed on Bithumb. It is believed that the price manipulation issues are the joint responsibility of exchanges and financial authorities, who are neglecting investor protection. Min has expressed concerns over the damages investors suffer from events related to price manipulation of “burger coins.” The Financial Supervisory Service’s probe is still ongoing, and the regulator has stated that it will not disclose information until the investigation is fully resolved.
The Virtual Asset User Protection Act, which came into force in July, contains clauses pertaining to investor protection and anti-price manipulation measures. Bithumb has stated that they have a system in place to report abnormal transactions to financial authorities based on monitoring, in compliance with the act. The investigation into AVAIL on Bithumb will serve as a precedent for financial and investigative authorities, regardless of the outcome. Both the Financial Supervisory Service and Bithumb have refrained from commenting on the investigation while it is active, as any mention of the progress of the investigation could affect market prices.
The case involving AVAIL on Bithumb highlights the importance of regulatory oversight in the cryptocurrency market, especially in cases of suspected price manipulation. Lawmaker Min’s efforts to address the controversy surrounding AVAIL prices and listing beam issues demonstrate the need for investor protection and transparency in the crypto industry. As the investigation continues and regulatory measures are enforced, it is expected that similar cases of price manipulation will be scrutinized more closely in the future. The outcome of this case will set a precedent for how financial authorities respond to such incidents, ultimately shaping the regulatory landscape for cryptocurrencies in South Korea.
