South Korea considers preemptive freeze on crypto accounts suspected of manipulation. Financial Services Commission reviews payment suspension system to block transactions before illicit gains are laundered. Proposed measures would mirror stock market tools. First phase of crypto legislation focused on user protection, second phase to establish broader framework.

Current framework in South Korea delays authorities seeking to freeze assets linked to crypto manipulation. Manipulation tactics like front-running and wash trading generate large unrealized profits. Amendments to Capital Markets Act allow account freezes on unfair trading. Regulators argue for stronger tools in crypto markets due to ease of transferring assets.

South Korea proposes extending account freeze measures to crypto to combat manipulation. Country aligns crypto regulation with traditional finance standards. National Tax Service warns crypto assets in cold wallets are not beyond reach. FSC explores imposing bank-level liability on exchanges for user compensation. Enforcement focus shifts to broader intervention for market participant protection.

Read more at Cointelegraph: South Korea Mulls Freezing Unrealized Crypto Gains to Curb Manipulation