South Korea’s Financial Supervisory Service said API-based crypto trading now accounts for around 30% of market turnover, raising concerns over manipulation risks.
The regulator warned that some traders are using automated tools to inflate volumes and distort prices through tactics such as repeated small trades, spoofed orders and coordinated multi-account activity.
Authorities said they will launch targeted investigations into accounts exhibiting abnormal API-driven trading patterns, signalling tighter scrutiny of automated trading across exchanges.
The warning follows reports from Yonhap and Maeil Business Newspaper outlining cases where traders simulated activity with rapid low-value trades before selling into price increases driven by retail participation.
In one example, automated orders between 5,000 and 10,000 won were used to create artificial momentum, while other strategies involved repeatedly placing higher-priced buy orders to push assets toward target levels.
The Financial Supervisory Service also cautioned investors against following high-frequency trading code shared online and urged them to avoid chasing sudden price spikes without clear justification.
The move comes as South Korea steps up crypto oversight, including new rules requiring exchanges to reconcile balances every five minutes and broader efforts to close regulatory gaps highlighted by recent court rulings.