South Korean Regulator Considers Collective Action Scheme in Response to Unfair Crypto Trading

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In response to reports of unfair cryptocurrency business practices in South Korea, the country’s financial regulator is considering a class action system to help protect investors. Unfair practices involve various deceptive, unethical or fraudulent approaches to business success.

Such practices could include, but are not limited to, fraudulent gift offers or free prizes, misrepresentation of services, and failure to comply with security standards. Regulators aim to end all of these practices to ensure the safety of crypto investors and users.

Class Action System Against Unfair Crypto Trading Practices

According to a report by 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 been filed with the Financial Services Commission (FSC) regarding losses suffered by investors due to unfair crypto-trading practices in the country. These practices include insider trading, market manipulation, sham trading and other forms of fraud.

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A South Korean daily has obtained information about the FSC’s proposed plan to set up a class action system. Officials noted that the class action law would apply to all ongoing illegal activities in the country. As such, the securities sector and the field of digital currencies are no exception.

The report also states that the FSC does not consider digital currencies to be finance. In the meantime, no one can say whether or not the regulators’ view will prevail soon.

Token Listing Bribe Information

The report reveals that trading platforms are listing some digital assets to collect bribes in South Korea. As such, some officials are joining forces to expand funneled probes into digital currency listing bribes to end such practices. However, this will only take effect if more evidence emerges.

Officials are investigating questions about these practices, with several developments underway. A notable example of such developments is the arrest of a Coinone employee. The report states that the accused received a $1.5 million bribe for listing 25 digital assets on the Coinone trading platform.

Additionally, the South Korean market is going through tough times due to several thefts and fraud cases in the country.

Total market capitalization is up more than 2% on the chart l Source: Tradingview.com

The nation had recorded a series of hacks, such as that of GDAC, which lost an estimated $13 million to hackers at the time. In another report, Bithumb has been under police investigation for allegedly manipulating the prices of listed digital assets.

According to the FSC class action system, the commission has yet to provide details on how the proposed lawsuit would work or when it might be implemented. However, the regulator will continue to monitor the situation closely and take the necessary measures to protect investors.

Featured image from Pixabay and graphic from Tradingview

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