South Korean regulators are investigating value fluctuations of the altcoin AVAIL on Bithumb last month “on suspicion of price manipulation.”
The probe is the first to be conducted under the terms of the Virtual Asset User Protection Act, which came into force on July 18.
AVAIL: Bithumb Price Spike in Late July
The act grants authorities the authority to look into possible price manipulation on the country’s registered cryptocurrency exchanges. One such agency is the Virtual Asset Investigation Bureau of the Financial Supervisory Service (FSS).
The bureau plans to look into the July 23–24 AVAIL price increases on exchange Bithumb. The coin’s price increased by 1383% during this time in a matter of only 15 minutes.
Authorities claim that a mysterious investor (referred to as “A”) “led” a wave of AVAIL transactions on Bithumb.
They reported that as of 10 PM on July 23, AVAIL prices were $0.17 per coin. Then, according to Chosun Ilbo, prices “soared nearly 15-fold to around $2.56 in 15 minutes.”
The newspaper also stated that the token “plummeted to [$0.21] at around 7 PM the next day, less than a day later.”
Investigators are concerned because, although AVAIL prices were volatile on Bithumb, they stayed steady on other platforms, averaging $0.15.
According to the FSS, A “led trading on Bithumb” after purchasing “a large amount of AVAIL from overseas vendors.”
According to the regulator, A once held roughly 1.17 million AVAIL coins, according to the details of A’s cryptocurrency wallet.
This accounted for “about 75% of the 1.55 million AVAIL tokens held on Bithumb at the time.”
Suspect Used Social Media to Raise Capital, Regulator Believes
The regulator also thinks that A’s purchasing actions were motivated by fundraising activities on social media.
According to investigators, A promised his 22,000 social media followers that once his AVAIL trading exploits were over, he would repay them at a premium.
According to the media outlet, A’s social media accounts are “well-known” among cryptocurrency users in South Korea.
Investigators believe that money was sent to A by the owners of 119 different wallets. They estimate that he has raised more than 1.2 million AVAIL coins.
They believe he was able to “collect a commission for himself” and “return” large profits to his investors.
On August 5 at UTC 15:30, AVAIL was trading for around $0.09 on the Bithumb exchange.