Financial regulator also investigating suspicious AVAIL transactions on Bithumb exchange
The South Korean National Assembly is set to investigate transactions involving the altcoin AVAIL on the crypto exchange Bithumb in July amid “price manipulation” suspicions.
Per Bloomingbit/Hanguk Kyungjae, lawmaker Min Byeong-deok, of the Democratic Party of Korea, will bring the case before an audit held by the Political Affairs Committee on October 17.
AVAIL Price Audit Begins
The token has been named “burger coin” by Min, which is a play on the term “kimchi coin.” “Burger coins” are tokens “issued overseas but listed on domestic crypto exchanges,” in contrast to “kimchi coins,” which are low-cap domestic altcoins.
During an audit last year, Min was the first to use the term. The “circulation issues” pertaining to the SUI coin were the main focus of that audit.
“October 17’s audit will let us address the recent controversy over AVAIL prices, as well as listing beam and manipulation suspicions on Bithumb, a platform that lists AVAIL.”South Korean lawmaker Min Byeong-deok
The phenomenon known as the “listing beam” is the sudden and dramatic increase in value of newly listed coins right after listing, followed by a swift decline.
In response to a wave of questionable transactions in late July, the Financial Supervisory Service, a regulatory body, began its own investigation into the coin in early August.
The FSS believes that on July 23, an unidentified investor “led trading on Bithumb” after purchasing “a large amount of AVAIL from overseas vendors.”
💍 South Korea has made it possible for married couples to divide cryptocurrency holdings during divorce proceedings.#SouthKorea #Cryptohttps://t.co/jBqnrcwYf8
— Cryptonews.com (@cryptonews) October 10, 2024
The regulator believes that after garnering support for their drive online, this trader attempted to manipulate prices by carrying out a large number of post-listing transactions.
The FSS believes that this contributed to the increase in AVAIL prices, which occurred “in the space of around 15 minutes,” from about $0.17 to $2.56.
The only token prices that changed were those of AVAIL on Bithumb; prices of the token on competing exchanges remained unchanged.
Lawmaker Demands Data
Min has asked financial regulators to provide the commission with “relevant data” for its audit.
This data includes “the status of abnormal transactions of AVAIL coins listed on Bithumb.”
Many think the unnamed investor “sold Avail on behalf of non-Koreans who could not use domestic crypto exchanges.”
Min’s office said:
“The price manipulation […] issues connected with the Bithumb-AVAIL price incident are the joint responsibility of the exchanges and financial authorities. They are neglecting investor protection. We will hold them accountable.”
Min has previously criticized crypto exchanges for “ignoring” the “damages” investors suffer from “burger coin” price manipulation events.
South Korea’s current account recorded the biggest surplus in more than six years, boosted by global demand for chips used in AI https://t.co/BuFVsgt7OD
— Bloomberg (@business) August 7, 2024
The Financial Supervisory Service’s probe is still ongoing. The regulator said it would not “disclose information” until its probe was “fully resolved.”
“Any mention of the progress of the investigation could affect market prices.”Financial Supervisory Service
Early Test for Virtual Asset User Protection Act
Bithumb, meanwhile, has also refused to comment on the investigation so long as it remains active. It said:
“We have a system in place to report to the financial authorities on abnormal transactions, based on monitoring, as per the terms of the Virtual Asset User Protection Act.”
The act came into force in July this year. It contains clauses pertaining to investor protection and anti-price manipulation measures.
The case would “serve as a useful precedent for the financial authorities and investigative authorities, regardless of its outcome,” an anonymous insider in the cryptocurrency industry told the media outlet.