South Korea Considers Payment Suspension System for Virtual Asset Price Manipulation Cases

According to Odaily, South Korean financial authorities are exploring the introduction of a 'payment suspension' system in cases of virtual asset price manipulation. This measure aims to prevent suspects from transferring or concealing illicit gains during the investigation phase. The South Korean Financial Services Commission discussed this approach in a routine meeting last November, suggesting that accounts suspected of manipulating virtual asset prices could be frozen in advance, similar to measures taken in capital markets against stock price manipulation. This would restrict withdrawals, transfers, and other fund outflows. The report highlights that under the current system, the confiscation or recovery of illegal gains from virtual assets typically requires a court warrant following a prosecutorial investigation, posing a risk of asset transfer during this period. The Financial Services Commission believes that a payment suspension mechanism, akin to those in capital market laws, could be introduced in the proposed 'second phase of virtual asset legislation' to more effectively prevent premature disposal of unrealized gains. A representative from the financial authorities noted that since virtual assets can be more easily concealed once transferred to personal wallets, such a system could help enhance early-stage regulation and asset preservation.