{"id":90497,"date":"2024-04-10T00:13:41","date_gmt":"2024-04-10T04:13:41","guid":{"rendered":"https:\/\/ifintechworld.com\/?p=90497"},"modified":"2024-04-10T00:13:42","modified_gmt":"2024-04-10T04:13:42","slug":"south-korean-regulators-to-stop-traders-dumping-stolen-coins","status":"publish","type":"post","link":"https:\/\/ifintechworld.com\/?p=90497","title":{"rendered":"South Korean Regulators to Stop Traders Dumping Stolen Coins"},"content":{"rendered":"
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South Korean regulators want to block traders from dumping stolen coins on the country\u2019s crypto exchanges.<\/p>\n

The move follows news from earlier this month, when regulators in the nation said they wanted to stop trading platforms from listing hacked tokens.<\/p>\n

Per News1, the Financial Supervisory Service (FSS) and the Financial Services Commission (FSC) want to move following a suspected hack on the NFPrompt (NFP) platform last month.<\/p>\n

A South Korean trader, some claim, knowingly bought NFP coins from a hacker, which they then reportedly \u201cdumped\u201d on the Coinone exchange.<\/p>\n

South Korean Regulators Respond to Hack Allegations<\/h2>\n

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On March 28, South Korean crypto community members were outraged by news that a domestic investor allegedly \u201cpurchased stolen assets from a hacker in an over-the-counter [OTC] transaction.\u201d<\/p>\n

The investor, it seems, wrote a social media post that suggests they may have bought coins they appear to have known originated from the hack. The investor admitted to buying the coins in an OTC deal.<\/p>\n

In the since-deleted post, this investor raises questions about Coinone\u2019s liquidity and capacity to process a large NFP transaction.<\/p>\n

The investor also appears to use a derogatory term to describe the Coinone CEO and Founder Cha Myung-hoon.<\/p>\n

Exchange, Regulators Act<\/h2>\n

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Coinone responded by adding NFP to its \u201cinvestment cautionary coins\u201d list, citing \u201csecurity concerns\u201d as its main reason.<\/span><\/p>\n

Regulators, meanwhile, have responded with a promise to probe the transaction and further allegations of price manipulation.<\/p>\n

NFPrompt prices fell abruptly on April 28, with authorities suspicious about the sale\u2019s effect on the token.<\/p>\n

NFPrompt prices over the past month. (Source: CoinMarketCap)<\/figcaption><\/figure>\n

Regulators are still overhauling systems related to \u201cunfair transactions\u201d ahead of the implementation of the Virtual Asset User Protection Act in July.<\/p>\n

They have ordered domestic exchanges to launch \u201cabnormal transaction systems.\u201d These systems will be able to identify \u201cillegal\u201d or suspicious transactions.<\/p>\n

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ATTENTION $NFP<\/a> Holders: <\/p>\n

We are writing to inform you of a critical security incident involving NFPrompt. It was discovered that a group of hackers compromised some wallets, including those of NFP\u2019s contract administrators. <\/p>\n

They illegally gained control of victims’ funds,\u2026 pic.twitter.com\/ZeQXLruvTW<\/a><\/p>\n

\u2014 NFP (@nfprompt) March 15, 2024<\/a><\/p>\n<\/blockquote>\n

An unnamed regulator told News1 that it would launch a full investigation into the \u201cNFP coin incident\u201d if the FSC or FSS suspected the trader used \u201cillegal means\u201d to obtain the coins. The regulator said:<\/p>\n

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\u201cWe can also look into whether it is possible to involve law enforcement agencies if these coins were stolen.\u201d<\/p>\n<\/blockquote>\n

Domestic exchanges said they were \u201cin the process of establishing a system to prevent unfair practices.\u201d<\/p>\n

Coinone Still \u2018Talking to Foundation\u2019 About Suspected Hack<\/h2>\n

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Coinone, meanwhile, said that an \u201cinternal review\u201d was still trying to establish whether a leak of the NFPromt foundation\u2019s assets \u201cwas an accident caused by hacking.\u201d<\/p>\n

12-month crypto trading volumes on the Coinone exchange. (Source: CoinGecko)<\/figcaption><\/figure>\n

The platform said it would \u201ccontinue to hold discussions with the foundation\u201d as it tries to \u201cdetermine\u201d the truth of the matter.<\/p>\n

South Korean regulators say they plan to \u201ccreate exceptional provisions for bans on deposit and withdrawals\u201d on exchanges.<\/p>\n

They want to create industry-wide standards that help all exchanges \u201ccommunicate\u201d information about potentially illegal transactions.<\/p>\n

They hope that such a move would create a fast-acting safety net to trigger at all exchanges following hacks and other leaks.<\/p>\n

OTC transactions, meanwhile, have come under the spotlight in South Korea. Regulators have promised to act after police reported multiple instances of OTC-related thefts.<\/p>\n<\/p><\/div>\n